1266: Randy Hines, CEO and Partner at The Kolache Shoppe

Summary

Restaurant Unstoppable #1266: Randy Hines, CEO & Partner at The Kolache Shoppe

Date: April 2, 2026
Host: Eric Cacciatore
Guest: Randy Hines, CEO & Partner, The Kolache Shoppe

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Overview: The Power of "Baking Great Days" and Growing an Iconic Brand

In this rich, motivational episode, Eric sits down with Randy Hines, CEO and partner at The Kolache Shoppe in Houston, TX, for a deep dive into the journey of acquiring, revitalizing, and scaling a beloved regional bakery. Randy shares his path from zero restaurant experience to running a multi-unit bakery operation with an effective, people-centric franchise model. The episode uncovers strategic decisions in operations, technology adoption, growth pains, and the soul of hospitality, offering a blend of inspiration and hard-earned operational insight.

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Key Discussion Points & Insights

1. Starting with No Restaurant Experience

• Randy’s background is in accounting and IT (11:13), with no previous food industry work.
• Story of how he discovered and eventually took over The Kolache Shoppe from its founder, Erwin Ahrens, driven by passion for kolaches and Texas regional foodways.
• The acquisition process took several years, illustrating the patience required to take over a legacy business (16:26, 25:25).
• Key lesson: "The idea of taking over is very different than just discussing taking over." (16:34, Randy)

2. Business Model & Early Revitalization

• The Kolache Shoppe focuses on a simple, QSR-style business with minimal seating (05:52).
• Most business is takeout, with 15% in catering (06:13).
• Locations range from 750 to 1,400 sq ft, with a strong preference for drive-thrus and walk-up windows (07:00).
• The original business’s books were not well kept, requiring Randy to reverse-engineer the financials (22:27).
• "I had to kind of…reverse engineer the books and just get a ballpark of what this thing is doing." (22:27, Randy)
• Early years focused heavily on presence and caring for the business: "Someone cares. You walk in and you’re like, someone cares about this little home." (24:22, Randy)

3. Key Numbers, Profitability, and Systems

• Pre-COVID, profitability per unit ranged from 20-25%; currently, it’s 10-25% due to rising costs (08:12).
• Target prime cost is still below 60% (09:04).
• Labor and scratch baking push labor cost to 32%, food cost around 27% (10:01).
• Standard kitchen staff: 3-5 people, scaling as needed (10:23).
• Key takeaway: Focus on what you do well, keep model simple, and monitor numbers closely.

4. Systematization & Technology Integration

• Early challenges were staffing: "First challenge was just staffing…like, what do you do if your baker leaves?" (38:13, Randy)
• Use of cameras and Jolt task software was transformative: Jolt sends notifications if key opening tasks (e.g., baker arrival) aren’t completed, vastly reducing owner stress (41:12–42:13).
• Importance of leaning into available tech: "We were popping up…all this stuff becoming available." (42:13, Randy)
• Kept things simple but effective – incremental improvements and technology adoption as business grew.

5. Growth, Opportunity, and Franchising

• Second location opened four years post-acquisition (2018), catalyzed by word-of-mouth and organic buzz (47:27), not aggressive expansion.
• At one point, considered selling the business, but a timely call from a developer opened the opportunity to launch a second unit in the Heights (50:27).
• Franchising emerged organically after key employees expressed interest in ownership; not originally part of the plan (58:04).
• Franchise process formalized with consultants and detailed manuals to support franchisees (75:37).
• Not obsessed with scale: "We don’t have a number. Who are you…and if that starts to change as you hit some magical number, it’s the number that changes, not who you are." (67:39, Randy)

6. Pain Points & Realities of Scaling

• Failed franchise experiment in a new suburb highlighted the difficulty of new markets and the need for experienced operators (81:02–82:53).
• Emphasized ongoing focus: stabilizing current locations, supporting existing franchisees, and preserving culture over rapid expansion (84:13).
• "Protecting the people…just making sure we’re really doing well by them." (86:04, Randy)

7. Organization, Delegation, & Outsourcing

• Structure: Randy (CEO), Lucy (partner), Michael (director of ops, partner), franchisees for each unit (88:48–89:06).
• Extensive outsourcing: bookkeeping, tax, PR/social media (89:23, 91:07), and app development/marketing tools (101:16).
• Use of Toast POS (2020), integrated with appfront for loyalty/email, and Jolt for tasks/checklists (94:02–96:23).
• Tech adoption guided by pain point resolution and freeing up owners’ time for higher-level decisions.

8. Culture, Human Connection, and the Future of Hospitality

• Recurring theme: culture and presence are what make The Kolache Shoppe unstoppable (109:28).
• Human connections trump automation in building customer loyalty and meaning (108:03–109:02).
• Randy’s philosophy: Be humble, have grit, and love food – "Food is convivial. Food is life and culture." (111:38, Randy)
• Future of restaurants: marry innovation (tech, experience) with "ultra human" touch—never lose sight of what’s real (106:30).

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Notable Quotes & Memorable Moments

• On staff and influence in hospitality:
  "We get people when they’re full of hope and optimism, and give them a good nudge out the door as they go conquer their day. It’s a big deal." (04:26, Randy)
• On raising prices:
  "We have not accelerated our price raises as quickly, with intention. We’re just not doing that, because we’re doing okay." (09:08, Randy)
• On presence and caring:
  "There needs to be some kind of presence… someone cares about this little home. That’s how we feel." (24:22, Randy)
• On early lessons:
  "Maybe you think you want it, then you do it…" (69:55, Eric)
• On attracting opportunity:
  "You don’t go chase opportunity. You attract it." (50:54, Eric)
• On building company culture and expansion:
  "If you’re not doing that, you’re really not succeeding—regardless what the numbers are." (79:01, Randy)
• On the value of wise growth:
  "Why chase that millionth dollar like it’s your first?...As you go on this arc of your life, you need to be pivoting all along." (72:37, Randy)
• On technology as lever for omnipresence:
  "Leaning on systems and technology that allows you to be omnipresent." (43:08, Eric)
• On what makes them unstoppable:
  "It really is our culture and our people… if you said, what makes us that group of birch trees that doesn’t get blown off the face of the earth—it’s our culture." (109:28, Randy)
• Three pieces of wisdom for legacy:
  "Be humble and grounded… have grit… be a foodie." (111:22, Randy)

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Timeline of Important Segments

• 03:26 – Guest introduction, vision for the episode
• 04:26 – “Baking great days” success mantra
• 05:45 – The Kolache Shoppe today: footprint, business model, revenue, prime costs
• 10:01 – Kitchen staffing structure and labor cost breakdown
• 16:26 – How Randy took over the business, meeting the founder, and early challenges
• 24:22 – The importance of presence, legacy, and generational revitalization
• 38:13 – First major operational pain point: staffing
• 41:12 – Implementation of technology: Jolt task management
• 47:27 – Local marketing and organic growth strategies
• 58:04 – The birth of the franchising idea
• 67:39 – Approach to franchising and protecting brand/culture
• 84:13 – Strategic pause on further expansion, focus on supporting team and existing stores
• 94:02 – Tech stack overview: Toast POS, Jolt, appfront, outsourcing accounting/PR
• 106:00 – Future of the industry: innovating without losing humanity
• 109:28 – What makes The Kolache Shoppe unstoppable
• 111:22 – Randy’s three legacy lessons

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Takeaways for Aspiring Restaurateurs

• Grow deliberately: focus on systems, culture, and community over mindless expansion.
• Build from the ground up: master every function of the business before delegating.
• Attract opportunity by being active, engaged, and authentic in your community.
• Adopt technology to free up your time and create omnipresence, but never lose focus on personal connection.
• Protect your core values and let your mission, not just opportunities, guide decisions.

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Connect with Randy & The Kolache Shoppe

• Website: kolachishoppe.com
• Instagram: Linked on website

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Legacy and Inspiration:

"We get one shot, right? So you want to honor the life that you’re part of, and to pass it along." (112:30, Randy)

Randy’s story is a testament to the impact of grit, humility, culture, and the power of saying yes to just the right opportunities—making every day a “baked great day” for team and community alike. This episode is an essential blueprint for anyone looking to grow a restaurant business with soul!

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For further notes, links, and recommended contacts, check the show notes at restaurantunstoppable.com.

Transcript

[A]

A couple things before we get started today. First, thank you so much for showing up week after week making my vision for restaurants unstoppable come true. Your downloads are allowing me to do this show the way I've always wanted to do it. Boots on the ground, word of mouth, leaders, referring leaders, giving the industry an uncensored, no BS platform to share their perspectives and truth. That's on you. Thank you so much. And we're just getting started. So if you're enjoying what we're doing here and you want to help us do it even better, please subscribe to this podcast on your platform of choice. And if you do that, I promise to do everything in my power to continue to improve the show. I'll deliver the restaurant tours you want to hear from and we'll continue to make everything you love about this show better. Thank you. Welcome to restaurant unstoppable. For 10 years and over 1,000 episodes, I've been traveling the country chasing word of mouth leads and having in person only long form discussions with the industry's finest owners and operators. Our mission is to inspire, empower and transform the restaurant industry by bridging the gap between this generation's leaders and the next. Listen to today's guest and so many others and get one step closer to becoming unstoppable. This episode is made possible by US Foods Running a successful restaurant takes more than just great food.

[B]

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[A]

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[B]

to get started with excitement. Allow me to introduce to you today's guest CEO and partner the collect lache shop, Randy Hines. My man, Randy, are you feeling unstoppable today?

[C]

You know, at this moment, I, I am totally unstoppable.

[B]

I'm sure you are, man. I heard nothing but amazing things from Dustin Teague. I, I came actually had him on the show, like, want, say it was a few months ago in like November, and I ran, I came back to town, I stopped in his restaurant, we continued the conversation off the record. And I was like, who else should I talk to? And like, you're the first name out of his mouth. Music. You know, I was wishing I mentioned this when I was on the show, but you got to go talk to Randy. He told me about what you're up to. You're a man after my own heart. My dream concept is a calzone shop, so.

[C]

Oh, right on.

[B]

Very similar stuffed bun. Yes. I call a kolachi and a Czech calzone.

[C]

Yeah, yeah, yeah. Exactly. Yeah.

[B]

But, man, I'm really excited to get into your business model to unpackage how you got to where you are today. But before we dive into who you are, let's get that motivational inspirational ball rolling with a success quote or mantra. What do you got for us?

[C]

Yeah, our motto is baking great days. That's pun intended. But the idea being that, you know, the mornings people are at their most kind of hopeful, the day is full of promise, hasn't unfolded yet, and, you know, we, we like to meet them at that moment. So the idea is that we, we get to get people when they're full of hope and optimism and give them even a good nudge out the door as they get a.

[B]

We have so much influence in this industry.

[C]

So much, so much, truly. Yeah. Well, think about it. You come in, it's expensive, six o', clock, and it's a bad experience. You're not on a bad trajectory. Regardless what happens? So we're like, no, we're gonna meet them with great optimism and friendship and most importantly, a great tasty item in their mouth. And then they go and conquer their day. It's a big deal.

[B]

I have a good friend, Joe Fontana, who is behind Fry the Coop in Chicago, and he likes to say, our job is delivering happiness. We serve happiness. I think that's really what we do in this industry. You know, it's. We need human connectivity. We need FaceTime, we need food. Like, all these things, like, make us happy, and that's what we're in the business of doing. So great way to get this thing started and before we kind of go back in time and really dive into who you are and what you're all about and what the kolachi shop is all about. Like, paint that snapshot. Where is kolache today? How many locations?

[C]

Five total. There are two that are corporate and three that are franchise.

[B]

Okay. And give me an idea of, like, the business model.

[A]

Qsr.

[C]

Correct. Yep.

[B]

I counted four seats.

[C]

Yeah. Four interior, four exterior. So minimal.

[B]

Eight total.

[C]

Yeah.

[B]

When you're operating on all cylinders.

[C]

Yeah. Yeah.

[B]

Assuming that most of your business is takeout.

[C]

Yeah. I mean, almost exclusively. Yeah. Saturday, you're to find fan of friends and family. You know, families, I should say, with their kids and such. But mostly it's takeout.

[B]

And what percentage would you say, would you do catering?

[C]

We do. Yeah. Yeah. It's not a giant portion, probably. I'm gonna. I'm guessing say 15% maybe.

[B]

Okay.

[C]

We want it to be more, but. Yeah, but it's mostly, you know, retail and people coming in, picking up for their office and meetings and such.

[B]

We should reach out to Pete Mora. I think he could.

[C]

Yeah, I know. We love. We love. They're awesome.

[B]

He's right down the street here in Houston. Yeah. So give me an idea of the kind of volume you're doing in this small footprint.

[C]

Yeah. So regarding footprint, this specific location, which is the Memorial City location?

[B]

Newest location. Yeah.

[C]

Newest. Yeah. Just opened last October, so we're 1400 square feet. Our original location in the granite plaza area is 750 square feet.

[B]

Okay.

[C]

But I'd say our ideal is somewhere between a thousand and fourteen. So we're kind of on the upper end of that.

[B]

Well, I did notice when I rolled up here, I was kind of expecting to see a drive through, but I do see you have your window, which is awesome.

[C]

Yeah. Our mobile pickup window is fantastic. We got really well branded outside. And it's. It's been a Huge. The thing is, you know, we have locations that even, even our, our highest grossing unit has a drive thru but they would kill for a walk up window as well. And so we knew we couldn't in this spot get a drive through. But we're like, well definitely getting the walk up window. Yeah, it's huge.

[B]

There's a ton of legacy giant corporation brands going out of business right now that are leaving these shells behind with the drive thru model there ready for smaller operators and move into. So it's kind of an exciting time for the 100. Yeah, I mean you're right. You're technically a corporation. Are you incorporated?

[C]

That's a, it's an llc.

[B]

Llc.

[C]

Okay.

[B]

So you're still technically independent operator, correct?

[C]

Yes, exactly.

[B]

And I just think it's a really exciting time. So your highest grossing, the one that you mentioned that's doing close to 3 million is.

[C]

It's like 2.2.

[B]

2.2. That is the drive thru.

[C]

Yes.

[B]

Okay.

[C]

And we have several drive throughs, but that one does have a drive through.

[B]

Yes, got it. And on average what is your, your pure, your per unit, like percent profit? Where are you landing there?

[C]

Yeah. So you know, again I'm going to give you a spread. So you know, on the low end probably 10% profitability. On the high end probably 20 to 25.

[B]

That's awesome.

[C]

I know, I know. You know, pre Covid, you know we, the, the unit I started with, which is one. The Greenway, Greenway Plaza, the one that's 750 square feet. You know, I was also in there all the time, as was my wife Lucy. And you know we would do 25.

[B]

Yeah, well you're a big part of the labor expense in that.

[C]

Correct, exactly right. And so but now, I mean it's kind of leveled out now we're, you know, on, on average, we're let's say probably shoot for 20.

[B]

That's still awesome.

[C]

No, it's fantastic.

[B]

And what is your, what is your prime cost split looking like?

[C]

Yeah, again, you know I, I'll once again reference pre covered. I mean pre covered. Probably it was you know, 50% to 50 to 55. Whereas now it's like high 50. So 59.

[B]

Which is goods going up, labor's going.

[C]

Yes, correct.

[B]

Rent's going up. It's all going up.

[C]

It's all going up. And you know we, we have not, we have not accelerated our price raises as quickly with intention. We're just, we're just not doing that because we're, we're doing okay. And we're definitely raising prices, but not at the pace that our costs are rising. So all this. That's. That's why our percentages are going up. So. But I, you know, still, as I'm sure you and your listeners know, 59, 60 prime cost is perfectly fine.

[B]

Yeah.

[C]

That produces 20, I'd say.

[B]

Yeah. I mean, that's as long as you're under 60. Depends on the model.

[C]

It does, it does.

[B]

And I'm assuming most of your cost is coming from labor, because that is correct.

[C]

Yeah. Yeah.

[B]

You have flour and water.

[C]

You've deduced correctly. Yeah. So our kitchen, we're not. We're not like, all scratch, but we do a good amount from scratch. And we're not. We're not. We're not buying a bunch of already prepared foods that's, you know, packaged. We're just warming up. We're making our dough from scratch and such. So, yeah, labor's, you know, roughly 27%.

[B]

Okay.

[C]

I don't know. Sorry, I missed. I missed that. Sorry. Labor is roughly 32%. Cost of goods sold around 20. 27%.

[B]

Got it.

[C]

Hence the 59 that we're kind of setting it for last year. So, yeah, labor's higher because we get more people doing. Doing, you know, real kitchen work. Yeah.

[B]

And I know not all of your units are exactly the same, but on average, like, peak hours, like, how many people do you have on the floor?

[C]

Yeah. I mean, yeah, as you said, it's gonna. It's gonna be determined by what, the volume. Yeah.

[B]

You're just the early phases of your franchising. So, like, you guys quite. Haven't quite dialed in the formula yet.

[C]

Correct. But I mean, let's take the corporate stores, for example, so that the original, you know, probably in the kitchen, maybe on a busy day for four to five people.

[B]

Okay.

[C]

In the kitchen or slower days, you know, three people.

[B]

I mean, that's the beauty of doing one thing really well. Right?

[C]

That's right. Yeah. Yeah, exactly. In the front, again, slower days, three people, busier days, five, six, even seven, depending on, you know, what we're doing.

[B]

Got it. Cool, man. So now I think we have a pretty good idea of who we're talking to and what we're gonna unpackage today. Where does it make sense to start sharing your story? And I just want to highlight real quick that I love your story. The way that you got here is the way if I'm opening a restaurant tomorrow, I'm doing it the way you did.

[C]

Oh, right on.

[B]

Yeah.

[C]

Well, I mean, I kind of think, let's just go back. I'll just try to give you a semi brief kind of synopsis. But yeah, my, my background is actually zero food, zero restaurants. Like, you know, I went to school for accounting and then information systems, and then I want to work in one of the big four accounting firms, Deloitte.

[B]

Okay.

[C]

Out of college and then traveled a lot, which I love travel. So I actually love your story. Like, I love seeing your camper outside.

[B]

I'm pretty spoiled.

[C]

No, that's fantastic.

[B]

That's great.

[C]

That's why I was asking you about your bike. And I'm like, where do you bike and what do you like to go? And I just. That was the one part of the audit job I had that I did love, is meeting people from all over the country. And I actually travel internationally as well, and west coast of Africa and Dubai and London and. But I didn't, I just didn't love the work. I'm a people person. I could never be that, you know, so not only am I, you know, in a cubicle all day with a laptop, people don't want to see the auditor. I don't care how friendly you are. You know, I'm there to ask questions, pointed questions about what you're doing. And so my wife and I got married in 2012 and, you know, already I had been pondering doing my own thing, and I got to know the owner of Kolache Shop, which was founded in 1970, Irwin Ahrens, God rest his soul. He passed away a few years ago, but he started it then. So when I was living in Washington, D.C. for a while, I just missed all the things that we miss here in Texas when you leave. And so from boudin to beef jerky to Tex Mex to margaritas, but foremost among all of them is kolaches for me. And so are you Czech? I'm not, but I grew up in a hugely Czech town of El Campo, Wharton County. Got it. I go to places like Prachek's Hill, G Smokehouse and Vincik's and all these great Czech really. I mean, bakeries, yes. But also places that had like really authentic Czech sausage. The smoking was real. The, the grind. It wasn't a fine grind. It was a medium grind. These things really matter, you know, like, is it a real casing? You know, like, it's not a hot dog. It's like it's a real casing. The medium grind, a real smoke. That, that was the, you know, kloba sneaky to get technical on You. That's. Again, we will get there in a second. But I don't. I don't nerd out on you too much, but that's the sausage roll check term for the sausage. Classic.

[B]

But anyway, so I'm not gonna lie, man. I. I had a oil change before this appointment.

[C]

Okay.

[B]

And I was like, rushing to get here.

[C]

Yeah.

[B]

I'm like, oh, I'm not gonna like the close at noon. Like, I'm not gonna be able to get there to get the B roll. And plus, like, I selfishly really wanted to try one of these kolaches. I'm always kolache. I'm saying it correctly. They look so good, man. And like.

[C]

Yeah.

[B]

And you guys are doing so well that by the time I got here, you were sold out. And I was like, oh, yeah, yeah, they. They look delicious. Savory bread. Anybody who knows me knows I love calzones. Yeah, I was looking forward to this.

[C]

But so. But no, to your point, I grew up in. In a town where, you know, and just again, a quick. A quick detour. So kolaches are traditionally the sweet ones. So apricot, you know, the pastries. The pastries, exactly.

[B]

People.

[C]

People will come in and, hey, give me a Danish. You know, I want to correct them, but that's basically. It's very similar to a Danish. Technically, your savory ones aren't kolaches. It's kolachi dough.

[B]

Okay.

[C]

But filled with, like, a sausage. So it's a sausage roll.

[B]

You have a smoked brisket?

[C]

Yeah, yeah, we sure do. We partner with the pit room, which is right here in the center.

[B]

I love that you're collaborating.

[C]

Totally. Yeah. And so. So growing up, we had great sausage kolaches, AKA klobasniki, and great cream cheese kolaches, et cetera, et cetera. So for me, I just thought, this is universal. But then you grow up and you leave the city and you're like, oh, no, this is not universal. And so then you leave the state, which I did. And I'm like, man, I can't get a good kolache anywhere. So that's why I introduced myself to Irwin. And at the time it was just, I want to make them for myself and my friends outside the state. Well, I did. Little did I know that.

[B]

So you were living in D.C. at this time?

[C]

Correct. This is back in, like, 050607. And I just. Little did I know he was already looking to find kind of a protege to take on. Take. Take on. To take the business to the next Next step. And so I just think he saw in me someone who grew up with the heritage, eating these things. Passion, passion. Appreciate it. I had a business acumen. I did. I was a cpa.

[B]

That's so huge. If you come into the industry with that. They say if you open a restaurant, there's two things you need to do immediately. Hire a lawyer, hire an accountant. And if you are one of those things, you know, is so helpful. And that's where most restaurant owners go wrong, is the numbers. So having that background.

[C]

It's true. So all this to say, I think he liked that package and he liked the business, he liked the. The history. He liked where I grew up. He liked all that. Yeah. Liked me.

[B]

Yeah.

[C]

And so, you know, I was like, hey, would you teach me how to make your kolachi? Just for myself, my friends. Which in hindsight, you know, how naive a question. Would you give me your, you know, would you give me a recipe for me, my buddies. But he was very friendly, and so he had me come in the shop a few times. And pretty quickly it became evident, like, we kind of hit it off and.

[B]

Yeah.

[C]

And he kind of let me know early 2007, like, hey, look, I'll just be honest with you. I'm looking to have some takeover. And I think you're. I think you're it.

[B]

Yeah.

[C]

Would you be. Would you be interested? So. So from 07 to, like 12, there was this kind of oning and off again conversation. And I was kind of the whole

[B]

time like, yeah, I lived in D.C. at this time.

[C]

Well, I moved back to Houston and mid 07. So in my mind, I'm like, look, I'm back in town. I'm going to be on this guy. Like, we're going to be doing it by 08.09. No, it just. Because I tell people now, the idea of taking over is very different than, like, just discussing taking over, you know, or rather, sorry, the idea of taking over is different than taking over. Like, taking over is in. Speaking of accountants and lawyers, like, you need your lawyer and your accountant and books and training and pro. It just. That's a lot of work.

[B]

Right?

[C]

And I just think for him, approaching that kind of precipice was a big deal. So, so Fast forward to 2012. I get married and my wife learns about what I'm doing as an auditor. And she, you know, even she knows me really well. And she was like, really? Like, this is this like forever? Like, you're gonna be an auditor forever? I'm like, believe me, I don't want to be. And so I just floated the bakery idea to her. And at first she's like, I don't know. But then pretty soon she's like, yeah, let's go talk to him. So we talked to him again. I'm like, hey, Erwin, he's my wife. Want you to meet her. And by the way, where are you at with this whole transition thing? And he's like, I'm still looking. And I'm like, well, I'm still interested. So that kind of reignited the conversation that we started.

[B]

How old was he during this time?

[C]

In his 70s.

[B]

Okay. And he started. I think he mentioned this, but he.

[C]

He.

[B]

The. The original shop was founded in 16. Sorry, 1969 by May Pop.

[C]

Yeah. So actually there's some story there.

[B]

May Pop.

[C]

So, yes and no. So there's a place near Hobby Airport called the Original Kolachi Shop, currently owned and operated by Kevin. Doubt. Phenomenal guy, for sure. You should go there sometime. Like, excellent, excellent. Kolaches in history. They started in 1956. Oh, wow. But by this. I think that pronounced. It actually pronounced Pope.

[B]

Thank you.

[C]

Because we had to say the same last name where I'm from. Got it. Or rather, I grew up with people the same last name. So regardless, they started 1956, if I'm not mistaken. And then in the late 60s, they tried to franchise or did franchise, one of which was the location at Westland Richmond. Okay.

[B]

That's the original location.

[C]

Well, that's the kolache. Correct. For my kolachi shop. That's our original location. Not to be confused with the original kolachi shop near Hobby. 1956. Separate entities. Separate everything. But Irwin was a. Was a passive investor of that first franchise at Richmond Westland. Okay. They. They get in late 60s, weren't doing well, and then the operators were going to just go belly up and shut it down. Well, Earn was like, well, what about my investment? And the guys are like, sorry, yeah, yeah. Basically he was like, how about I buy you out? You know, I'm sure it was pennies on the dollar, and I'm sure they were happy to get anything. So he bought them out in 1970. Which is why we say consciousness founded in 1970, because that's when Irwin took over his operator. Yeah. So that's.

[B]

That was what was Irwin's background as an investor. Was he?

[C]

Yeah, well, I think it's one of the. One of the things he liked about me is it was a very similar story because he studied at UT Economics. If I'm not mistaken. And so spent, I don't know, 23rd, I don't know, 15, 20 years in the business world. And then, like me, had an entrepreneurial spirit, quit his job, bought, you know, bought this bakery that initially he was just an investor in, got it right, quit his job, turned, turned corners and did a great job with it for the next, you know, 40 plus years. And so I think you saw me, it was like this guy's doing the same thing.

[B]

Was he the baker, was he here every day doing the thing or did he hire people to do that?

[C]

My guess is kind of like me in the early years. I bet he was him. I'm sure he was baking and making.

[B]

I think if you, if you know the job, it makes it so much easier to delegate the job. And also if the person that you hire decides that they no longer want to be a baker, you can step in, you can step in until you find the replacement. I think you have to, when you're a small business owner, you have to learn every aspect of that job.

[C]

And if, and if you don't, you just have to understand like that's that's going to be a place where you get hamstrung or you might have.

[B]

The goal is to elevate yourself out of that position, but you should be able to descend into any role when you need to.

[C]

Yeah, yeah, yeah.

[A]

This episode is made possible by US Foods. It takes more than great food to run a kitchen these days. With US Foods, more means consistently high quality products, industry leading tools and flexible deliveries that let you grow your business on your schedule. Whatever your goals, US Foods helps you turn them into reality. As a US Foods customer, you'll gain access to their industry leading moxy platform, which doesn't just make it easy to place your US Foods order, but it uses AI powered technology to help you take more control of your business and increase profitability. You can also explore the latest issues of Food Fanatics magazine from US Foods. In each issue you'll find real world success stories, bold culinary inspiration and practical profit boosting ideas you can put to work immediately. Visit usfoods.com expectmore to learn how to become a US Foods customer again. That's usfoods.com expectmore and so that's my

[C]

guess is that he was in those roles in the beginning. By the time I met him, he was, I mean, pretty absentee. I mean he had a ranch out in Yoakum, which is a shiner and kind of west of Houston. So you'd come in like on Saturdays, check In, do payroll, do some shopping, and go back out.

[B]

The wrench didn't come with the deal, did it?

[C]

No, I wish.

[B]

That's too bad.

[C]

No, no, I wish. Yeah, actually, he's funny. He invited my family out there a couple times. We had a great. Just. He was super. It was super communal and friendly. Like, some. Some transactions are very arm's length, and this was anything but. Like, I invited him to my family home.

[B]

It should be totally.

[C]

Yeah. So he came out and met my family years before I took it over because I wanted to know where I come from. And then he invited me, my family, out to his ranch, and we went out there and had a great day.

[B]

And so I'm assuming that when you guys started having these. These conversations, the books were probably dialed in because this was his background. He was on a schmuck.

[C]

Well, no, it was the opposite. Like, really?

[B]

I'm surprised.

[C]

Well, yeah, he wasn't a schmuck. He definitely didn't have him dialed in. His books were very loose and informal. Now, part of that is, again, he's in his 70s, probably at this point, he doesn't even need the income per se. So if they were dialed in, it would have been when he was probably in his 50s, 20 years earlier, 10 years earlier. By the time I got involved, no, it was super, super informal. So I had to, like, kind of, you know, what do you call backwards hack? You know, the reverse engineer. Reverse engineer. Thank you. Yeah, reverse engineer. The. The books and kind of make my own. And to get it. And just to get it. Just to get a ballpark of, like, generally, what is this thing doing? And it wasn't. And to be frank, it wasn't doing great, which is what the asking price was, which I won't say, but it was pretty low because I think he knew, like. Yeah, it's. It's. It's. You're not getting. You're not getting. You know, it's not humming. But it had potential. Yeah, that's. I think that he knew I saw

[B]

the wife that was going to invigorate.

[C]

That's it. I reanimated something that at one point, 20 years, in fact, we've got people coming in now that say they're in their 40s and 50s, would say, I came in here as a kid and this place was, like, slammed. And like, you know, and we are again. But it definitely had taken a dip.

[B]

If you're not growing, you're kind of dying, right?

[C]

And it was. It was dying. Yeah, it was dying. And we saw It's a generational thing.

[B]

Like you need to bring in new life. Totally.

[C]

To.

[B]

With generations comes different approaches to doing business.

[C]

Totally. Yeah.

[B]

Like your, your community, the people that you socialize will come in. Like you need that those waves of generations get involved.

[C]

Yeah, the, the, the word that we use internally is kind of just the word presence. And I got this idea, this image of like, I don't know, a person like, you know, in some small home in some rural, rural place, but they're like still sweeping their floor every day and kind of keeping it tidy. And you just walk into a little home in some rural community and you can tell like, yes. Yeah. It's not, it's not sexy, but like, you can just tell this, it's. It's this presence. Right? There's a human.

[B]

Somebody cares.

[C]

Someone cares. You walk in and you're like, someone cares about this little home. That's how we feel. Like there needs to be some kind of presence. And again, I'm not, I'm not, I'm not faulting him per se, because maybe if I was 74, it might. I just think he knew. He knew it's now way. It's now less than what I want it to be, which is why I needed to find someone to, to animate it.

[B]

Right.

[C]

To be presence again. So we have, you know, we can reanimated it. And he was super happy. In fact, a quick, quick antidote. We took over a few months go by. We rebranded. You know, again, this is all the Wesleyan.

[B]

How much has the brand shifted from what he had?

[C]

I mean, significantly. He was. He had just a little business card with a green logo that said Kolache Shop with a little man holding a tray.

[B]

Okay.

[C]

Kind of a generic baker holding trash.

[B]

Changed the colors. Blue.

[C]

Change everything. Yeah, except the name. Yeah, blue. Yeah, exactly. Blue and light blue.

[B]

Sorry, I think I derailed your grain of thought.

[C]

No, no, I was gonna say. Yeah. So we, we took, We. Lucy and I took over April of 2014. We rebranded, like October, November14.

[B]

You moved back to Houston in 07. So.

[C]

Correct.

[B]

There's a five, six year period.

[C]

Seven year. Yeah, it was, it was. Which was much. It was like six years longer than I expected. I expected to be like, I'm going to get back and bam, we're going to like be doing this thing in 08. And it just. I guess what I would say to people is in some sense it's not a surprise, but things in reality are always different than ideas and you just, you don't expect. But but we rolled with it.

[B]

As an accountant, I'm sure you're doing your due diligence.

[C]

Yeah.

[B]

You know, you're paying attention to the details. You're shifting.

[C]

Correct.

[B]

You're getting the numbers dialed in.

[C]

Yeah.

[B]

Did he give you access to all that stuff before purchasing? Like, were you kind of in here, like, going through stuff, trying to get your. Your mind wrapped around the.

[C]

Yeah, the latter. The latter for sure. Like, he had no issues with, like, hey, come in the shop. Like, he's like, you need to be in here working in the shop.

[B]

You got to learn it.

[C]

You got to learn it. You need to be meeting the people.

[B]

So you. You purchased it in 2014, but how long were you working in it before the purchase?

[C]

I would say on and off. I mean, really on and off for. For, like, five, six, seven years. Now, in full disclosure, it wasn't like months and months of the year. It was like, a few times during each year.

[B]

Slowly acclimating.

[C]

Slowly acclimating it. And again, partly because I wasn't sure where I was going to take it over. So, like, I don't want to get in there for six months and then find out he was going to bulk and not do it. So it's kind of just like. Again, speaking of presence, I was in there. In there, but. But I also hedged my bets, and I'm like, what am I going to. I'm not going to go all in until I know you're all in with me. Yeah. So again, we took it over 14 rebranded the fall of 14, February of 15. The Houston Chronicle did this great article on his story and then morphing into our story. And so he. I didn't know, but he was a Chronicle subscriber, so he gets the newspaper, and I pick up my phone one morning, and I was busy. That was a Sunday morning. And he calls me, looks at voicemail. He's like, randy, call me right away. I saw the article. I cannot. Like, he was, like, tickled pink. He was so enthused. I call him, and he just. Just is glowing. And obviously that, you know, that's not. I don't think that for granted, because he. He could. He could have. I don't know. He could have. He could have nitpicked. He could have withheld the praise. But he just. He was just effusive, which, of course, gave me, I mean, great encouragement.

[B]

Yeah. Great accolade. Or great press right out of the gates, too.

[C]

Great press out of the gates. But then to have him just say, this is. Is exactly what I wanted to happen reinforces the story we're just discussing, which is he knew it was well past his prime. He knew it wasn't as animated as it should have been. It wasn't. Didn't have as much presence. It's a lot of work.

[B]

It takes a lot of energy. You're in your 70s.

[C]

I mean, no, 100%. Look, yeah, I took over in my 30s. And I will just tell you, I mean, yeah, we were. Gosh, we just sucker punched and we just didn't, we just didn't know.

[B]

We're gonna get into that too.

[C]

We just didn't know. We just, we just thought, in fact, we were, you know, we're, we are newlyweds in 14 and we're like my wife.

[B]

It's hard to have her get married to you before you purchase extra. That's a good move. Yeah.

[C]

Yeah, exactly. But she, she lost her first husband to cancer and then so she had, they had three boys. I adopted the three boys. So out of the gates, I got three kids. And so, you know, we're like, hey, let's, let's quit this day job audit and we'll, you know, have a small bakery and we'll have more time together and just more flexibility and more freedom and more control and. Which is, is true. But the question is, at what cost? You know, like, I mean, for a long while I was actually the one baking and I'd come home at 10 o' clock in the morning after my bake shift, and Lucy said to me, look, no offense, but you're useless to me when you come home and you smell and you smell like, like butter, coffee and sausage. And it's just, it was a trim.

[B]

It's a give and take and it's a lot of give up front.

[C]

A lot of give.

[B]

You can start taking those.

[C]

It's, it's mostly give, let's be honest. And you got to have tenacity and grit to just push past that because it's. Oh, it's overwhelming and. But like a lot of things, you just keep moving, you know, you keep moving.

[B]

And I love what I love about your story. I mean, the mission statement is to inspire, empower, and transform. And we're in the inspiration phase right now. Zero restaurant experience. Somebody liked you. You had a passion, an interest in this thing and you just had the discipline and the, the grind to show up over and over again to give, give, give. And I think now you're probably at that point 12 years in where you're starting to probably See some of the, the fruits of that labor.

[C]

100. Yeah. Yeah. So I say there's, there's, there's still some give. Yeah. Not nearly.

[B]

The give never stops, you know, you're right.

[C]

Not.

[B]

Comes a little more balanced.

[C]

No, True. No. Yeah. I think now it's very balanced. Yeah. So I would say in the past few years, we finally started reaping the fruits of like, what we pursued in 2014 of like, hey, let's. More flexibility, more free time together, more, you know, we're seeing that kind of in spades now. Yeah. But boy, those first few years, man, you're just, you're just in it.

[B]

I can't wait to get into the evolution. But I want to point out one thing. Are you familiar with Corey Sanchez?

[C]

No, I don't believe I am.

[B]

So she is the author of the Main Street Millionaire. She's kind of a big deal influencer. I think I discovered her like about a year ago is when I first started diving into her work maybe a little more a year and a half ago. But her book, the Main Street Millionaire, got me hooked on her. And her whole thing is helping basically the, the, the. I guess it would be like the boomers, like, or the greatest generation. Like there's so many people on Main and Main on these, like in these, these old, like whether they're plumbers or electricians or these old, these staples in the community that there's a generation. The boomers are kind of transitioning out right now and they have all these independent operations across America and sometimes they don't have kids or their kids don't want the shop. So there's all this opportunity right now. There's like this huge opportunity for generational shifts happening where the, the baton is ready to be passed and a lot of people don't have the, the next generation to pass. They don't have a, a family member or somebody interested, I think, you know, is it. Irwin is a perfect example of that where, like, he had this thing and he needed somebody to give it to. And if you go looking for those people, they're out there, go into whatever restaurant or whatever business you admire and just say, I love this thing.

[C]

Yeah.

[B]

And if you're regular and there's a rep, you know, there's rapport there, and you just start asking, you take an interest and you say, like, what's. What, what's your plan? Like, yeah, you, you. Are you guys going to retire? Like, are you going to be passing the restaurant? There's a good chance that their retirement plan Is die.

[C]

Yeah, yeah. No, it's true. I, I, it's interesting. I read a book, Setting the Table by. Yeah, exactly. And great quote in there. He said, my mantra, or one of his many, is abcd so that you

[B]

can abc, always be connecting the dots.

[C]

Always be collecting the dots.

[B]

Right?

[C]

So you can, so you can always be connecting dots, always be collecting, so you can always be connecting. And I'm like, man, what a, what a brilliant phrase. To your point, about, like, just go in, like, you just, just meet people, go in, ask questions, don't be afraid of. No, just, you know, again, in hindsight, are you thinking like, look, the fact is, who, who just calls up a random bakery and says, can you teach me to make your pastry? Your, your pastry, your calzone, your burger, your whatever, whatever it is. Look, the fact is, they may say no and don't call back. Okay? That's 10 seconds out of your day. No problem. But in this case, that one phone call that. It's funny, I was on an audit client in downtown Houston. I remember the day. I was like, I'm gonna just call this place. I went to a conference room and called him up and was like, hey, you know, just one of the. So he said, yeah, you sound interesting. Come, come, come by one day.

[B]

Yeah.

[C]

And that started all of this.

[B]

So in that book, she kind of lays out a way to go about doing this. What she recommends is that if you, you can purchase a business with no money down, and what you do is you work out a plan where a percentage of the profit just goes directly to the owner until the value of the business is paid off. And you do that. I mean, what, what approach did you take? I mean, that's the approach that she recommends taking. If you don't have the money to put down and you're willing to put into sweat equity and you're just willing to take over this thing at this point, for a lot of people, the business they own might be a burden. You know, they might want an exit strategy and they want that mailbox money.

[C]

Yeah. To your point, they might have incentive to.

[B]

Right.

[C]

To do that. Now, my case, I had spent 13 years as a professional, right? And so I had the money. And as I mentioned earlier, the value of the business was quite low, and he knew that. So I had the money. So I would say if you have the money, in some sense, that is cleaner, because at this point, you know, I bought it outright, 100%. So, like, he's now removed. And, you know, I've talked to owners before. Where they've got some, you know, passive investors and whatnot. And in private, they said, I kind of regret having passive investors because although they're passive, you know, they're giving the feedback on the. Why. Why did you impress? Why did you price your enchiladas that way? And you should get your avocados from somebody somewhere else. Like, look, you're a 5% owner. You know, so again, in terms of, you know, being clean, I like the fact that Lucy and I started as 100% owners. He did say to me, look, you're welcome to call me anytime to ask questions, which we did occasionally, but. But I would say I like the idea of, hey, if you don't have the capital, that is not an automatic inhibitor to.

[B]

Yeah, you could still be someone.

[C]

You could. Absolutely. You can. Yeah, totally.

[B]

Any other advice on how to approach that takeover and how to do it smart and how to protect yourself and anything that you would have done differently after doing it?

[C]

Yeah. I would say in my case, because I was a cpa, I didn't hire my own bookkeeper or even attorney early on. I would say, again, it worked out for me. In hindsight, I think I would have been, you know, I'm a cpa, but my profession was not hardcore financial audit. It was more IT audit. So all this to say I knew enough to be dangerous or to cause trouble. And so I would say, yeah, spend a little more money up front with the professional number.

[B]

If it's an option.

[C]

If it's an option, and it may not be, hey, that's okay too. But if you have the option, do that. The second thing is that I would probably. I spoke to a couple of restaurateurs, you know, operators, and I probably would have spoken to even more.

[B]

This guy's coming in hot.

[C]

Just. Just to make sure. No worries.

[B]

Sorry, fella.

[C]

While I'm at it, I'm gonna check the temperature to make sure we're. You good?

[B]

I'm good.

[C]

Okay, good.

[B]

Yeah.

[C]

Yeah. So, yeah. So again, professionals on one hand, just talking to more people. And funny, we had. We actually talked to a guy who owned a cookie shop down the road. He's. He's still a friend of mine, still does his thing, and I remember him saying to me, like, don't do it. And I think we actually get that from the few people.

[B]

That's my goal with this podcast first, you know. Yeah, I like to joke. The mission is obviously to inspire, empower, and transform the industry. The first mission is to talk you out of it.

[C]

When, I mean, Honestly, so. So the irony is that if you people who ask us now, and we're now, what, 12 years in, we now say, don't do it. Like, just don't do it. And if you know, because we know statistically the number of people who it actually is a good fit for, it's very low.

[B]

Right.

[C]

Many people fail. No. No surprise there. We all know that. So we just, out of the gate were like, probably not for you. Probably not going to be, you know, your cup of tea. I know you may enjoy baking most. What you do is not baking.

[B]

Have friends over and bake for them.

[C]

Have friends over, keep your day job. Exactly. So it's just. It's just. Not only is it difficult, it's just different than you expect. Yeah, right. That. That's the key thing. You're like, well, I don't. I didn't even, like, half of what I'm doing now, or like, this is what I want. I don't even good at. I'm not good at this. And I didn't expect this. And, you know, it's just. It's just that's kind of a mountain. But as you said earlier, you get past that and you kind of acclimate, get your sea legs. There are a lot of. There are benefits, which is why you speak to some seasoned martial tours, they're going to say, well, there are elements that I wouldn't trade it. And so, you know, I'll talk to people and I'll say, look, like, look, I liked my 13 years doing audit. I mean, I could qualify that. There were elements I didn't like about it, but for the most part, I liked it.

[B]

But you get to still do that. This is such a numbers game.

[C]

No, exactly. So there are elements of that job that I can still do here, right? Tweak, you know, tweak your spreadsheet or whatever.

[B]

There's so many potential lanes to fall into 100%.

[C]

But. But the beauty is that, you know, I'm never behind a laptop all day long, right. I'm just. I'm, like, doing that for an hour, breaking. Then I'm helping with the delivery, then I'm doing the podcast and I'm like, behind the counter. Then I'm. It's just. It's so. It's so textured, you know, it's great for add.

[B]

Oh, totally.

[C]

And I probably had that, so it's great.

[B]

I want to start getting into the nitty gritty of your evolution as a restaurateur. So you purchased in 2014, what were the first. I like to use this analogy. Like if the current day is like if we're in a five speed manual transmission.

[C]

Yeah.

[B]

Right. We're in maybe fourth gear right now. You're about to get into fifth gear with your franchising. What was first, second, second and third. Take me. Like, what was like the first gear and like, what were your challenges getting into second? What were those. Those challenges for you going to the next phase.

[C]

Yeah, I. Yeah. So I'll. I've got a few I can rattle off. So when we first took over and then rebranded, we stayed. After the Chronicle story ran, we kept, you know, decently busy, which was a good sign. But shortly after we had some kind of. We lost our main kitchen manager or I'm not maintaining the kitchen manager who also.

[B]

Did the kitchen manager come with the shop?

[C]

He did not. But he was friends of Irwin and had worked at. Irwin used to have three locations. When I took it over, we only had one. But this guy was kind of friends of the organization and Irwin, so he knew a lot. And we wound up parting ways with him. And so like overnight, I'm now baking and I had no baking experience. And so I would say the first challenge was just like staffing. Yeah, Less. Less customer service. Although that was its own challenge, but more just like, how many people do we. Do we need. Like, how. What do you do if you like you. Your baker leaves or you let them go or what? That was a major, major.

[B]

How'd you overcome it?

[C]

Well, you know, honestly, I wish I could say it was with finesse and a scalpel. It was just brute force. Like just we, like, I just. I came in, I learned how to bake very painfully and awkwardly, but learned it. And I did that for like two months. And then we learned how to where to post and the local newspaper and Craigslist and indeed. Or whatever.

[B]

Is there a tipping point where you started to get a dial on that?

[C]

Yeah. Yes. I would say, yeah. All this kind of started going down like in early 15. Right. As we're getting a little busier. So the squeeze was real, you know, And I would say by late 15. By then we had like a couple of bakers who weren't fool proof and they still occasionally would not come in. And you'd wake up, you're like, oh my gosh, why is no one at the bakery? And it led to sleepless nights. But I would. That's actually an example of like, you have pain points and you're just managing pain points. So, yes, we hired a Couple of new bakers. But maybe they were a no call, no show that day. Earla would come in late, so I would set my alarm for like 10 minutes after they're supposed to be there just to, just to check if you. My cameras, are they there? And if they weren't there, I'm making a phone call. Are you on your way?

[B]

If not, how far were you from a drive in? If you had to be there, that was the beauty.

[C]

I was like half a mile away. It's like five minutes.

[B]

Yeah.

[C]

Which, which, which was great in those first three or four or five years. I mean it was.

[B]

Do you have cameras?

[C]

Yeah.

[B]

So you didn't even have to like call. You could just look to see if I could look. Yeah.

[C]

And if it was dark in the kitchen, that's what I'm calling the baker or whatever. Yeah. But then we found this software called Jolt, which is like a task wizard.

[B]

Yeah, it's like a checklist.

[C]

Correct. And it's got other bells and whistles too.

[B]

But still using Joel.

[C]

We are. Yeah. Yeah. Since 2017.

[B]

So you found Joel. And how did that change things?

[C]

Well, it changed a lot of things, but specific to this baker task, like I need to, I needed to know, I needed someone to wake me up or something to wake me up if my person didn't show up within 10 minutes or 15 minutes of the. Right. Of the, of the time. So if that task isn't checked off,

[B]

the first thing on the checklist.

[C]

Yeah.

[B]

Is you're getting a notification.

[C]

Yes. Well, I'm not getting a notification if it's checked off in time.

[A]

Right.

[B]

But if it's not.

[C]

If it's not, I'm getting a text and I'm waking up because my body already knows it. Here's that chime. At 3:30 in the morning, I wake up right away. That's when sometimes it's a false positive. Like they're there, they just forgot to do Jolt. I wake up, I'll see him in the kitchen. Like, we're good.

[B]

Yeah.

[C]

But back in the day, that was a huge thing. That was huge, actually.

[B]

Yeah, that was. I remember that Jolt being one of the first techniques technologies that I discovered were like, that was like that time, 14, 15. It was when there was a real shift towards low hanging fruit affordable technology where like the, the gap was, the bridge was starting to be gapped from like the like.

[C]

Well, you've got huge. You've got your legacy systems for giant operators. Right, exactly. Including points of sale like Aloha, ncr, But, like, that's when you also started seeing Toast and Shopkeep and Revel. Revel and Jolt coming in. Breadcrumb Jolt is coming in. And so we, you know, we, we. It was kind of fortuitous that we came in when we did, because we're popping up or taking over and all this stuff becoming available.

[B]

And you also. Information technology background, and I was curious about that. So you're into this sort of thing. So how did you discover Jolt? And I'm surprised you're still using it.

[C]

Yeah, I feel like, if I recall correctly, we're friends with the owners, operators of. No, it was Roostar. I don't know if you've heard of Roostar. It's a great Vietnamese concept. In town, Linda and Ronnie, I think they were the ones that were using it. And so that just, you know, I'm like, gosh, this sounds pretty cool. So we looked into it again. Mostly the time it was just that one function. Wake me up if they don't arrive. That way I'm not having to set my alarm proactively and waking myself up every morning.

[B]

Now you're instantly getting two extra hours, which is huge.

[C]

100%. So you mentioned, like, how did I grow past it? Like, major pain point hits, and you're like, solve that pain point.

[B]

Also just a beautiful example of leaning on systems and processes, but. But also using technology that allows you to be omnipresent.

[C]

Yeah, yeah, yeah. So cameras were a big thing. Jolt was a big thing. And. Yeah. So even, like. And so all this to say, even though that was the one main pain point, Joel also has all this other stuff. So, like, for example, let's say there's a task the staff kind of repeatedly kind of overlook or ghost tick, so to speak. Yeah.

[B]

That's a new item to the checklist.

[C]

Or. Or it was already there. They weren't. They were just. Weren't. They just weren't doing it. They were just checking it off. Now we make it a picture. Right, Right.

[B]

Why don't you type? Yeah, I mean, I think Joel is kind of. They were like, first to market. Blue Ocean Effect. They were like one of the first big independent task management tools out there.

[C]

That's right.

[B]

Or checklist tools, whatever you want to call it. I think they're pretty. Tools like that, I think are baked into most enterprise solutions today. And there's a. I think another one's blanket. Like, the market has gotten much noisier in that.

[C]

That's right.

[B]

And from what I understand, like, a lot of Them are awesome. Like, there isn't, like, one that's a clear.

[C]

Yeah. I mean, you need. Back to your question about why we're still using Jolt. To be frank, we just. We. We've been with it so long. All of our systems are in it. So as we roll a new location, we're like, we'll copy.

[B]

If it ain't broke, don't fix it.

[C]

Yeah, we'll copy it, move it over, and tweak it, obviously. But, like, for the most part, it's like, this is what we've been doing. Are there sleeker ones out there today? Probably. But to your point, it's not broken for us. So we're like. And we got some great pricing. Like I said, pricing. And so. Yeah.

[B]

Yeah. So, okay, so that was your first challenge, was just the staffing.

[C]

Staffing and then, like, making sure people

[B]

are showing up, leveraging systems and technologies to be there when you're not.

[C]

Yeah.

[B]

What was the next big challenge for you? The next struggle.

[C]

Yeah, the next struggle was I was. So even though we plugged a few of those holes we just mentioned, I was still in there, like, all the time. And so it was just how to. How to get enough revenue to hire an actual store manager so that I could actually, like, not go in for a day, which didn't mean I wasn't working. It just meant I was, like, spending half a day doing administrative work. Maybe I was doing a delivery or doing a hotshot.

[B]

You just need a presence there.

[C]

Exactly. So I actually hired an old friend of mine who's now. He left town, but at the time was living in Houston. And so he needed a job, so hired him. This is back in early 2016, so I guess you could say kind of the intervening issue was getting that revenue up from, like, mid 15, mid 16, which really, you know, that was just a lot of organic buzz and pr, and that was just more of us being out in the market. Like, we're meeting people again. Back to, you know, Dave or Danny. I forget Danny. You know, abcd. So you can abcd. Like, we were just collecting dots. We were, like, marketing 100%, you know, grassroots boots on the ground, dropping boxes off at places, doing the occasional interview, you know, saying yes to everything. Donate. Donate to a school. You got it, like, set up, you know, Memorial. Memorial park, fun run. Can you donate? Definitely. We can. And, yeah.

[B]

And were you donating money or food?

[C]

The food 100. Food. Yeah.

[B]

Like, we never donate money. Always donate always.

[C]

So we had, like, a banner up and food mouth and my Shirt, my cap on, donating and smiling and saying hi. So really from mid 15 to mid 16, was, was that kind of, you know, gorilla getting out? And so the sales definitely increased enough to then hire this.

[B]

How much did your sales increase just by doing that?

[C]

I mean, it was, gosh, if I could do the quick math on my head, I mean, gosh, 20. 20%. Wow. Yeah.

[B]

That was enough for you to, to be able to hire help.

[C]

Yes. Yep. So hiring help was a big thing. So again, you see a pattern. It's just a small, small steps, right. That build up. But like, it's just, you know, so by late 16, I've got this manager who's still kind of trained up. So I wasn't going in every day. I was going in still a lot and I was still working a fair amount at home when I was home. But that was a major relief from going in every day instead of having to come home and then do all this administrative work that now I could like say Tuesdays and Thursdays I'm not going into now. I could just like stay home and had breakfast with my kids. A little more balance, right?

[B]

So then a little bit more of the life.

[C]

A little bit more. Yeah. You know, and actually from funny, funny note, from 2014 through 2017, I was still picking up some contract audit work. Maybe, I don't know, two months a year, supplemental income. Supplemental. The part of it was like, this could still fail, right. I need one foot in the water. Like, I'm keeping my contacts warm. I'm still going to lunches with people. I'm doing a few audits a year because I'm like, I'm out of the woods at all by any stretch of the imagination. So.

[B]

And you opened your second location in 2018, December of 18. So yeah, four years from purchasing, you had about four years of dialing in the systems, building up the bench, putting like, you know.

[C]

Yeah.

[B]

Bringing on more management so you can help you bear the load. And I mean, were there any other struggles before making that decision in 2018 to open the second location?

[C]

I mean, I would say, you know, early 2017, we had these steps that just described, right? Technology, some staffing, positive movements in staffing, some press, increased sales, the guy, the manager, et cetera, et cetera. So you might think, well, gosh, I mean, it was doing pretty well and it was.

[B]

Were you in the black at this point?

[C]

We were in the black.

[B]

Were you double digit black at this point?

[C]

Yes. Okay, that's just, just big deal, right?

[B]

I mean, 10% is like industry, like target, like, I mean traditionally 100% think people know that you can do 20 like you have done.

[C]

Yeah, yeah. So we, so we were, we were

[B]

doing okay with one location.

[C]

With one location.

[B]

And were you Petty broke seven figures at this point in terms of total revenue?

[C]

No, no, definitely not. No, back, back, back then at the Richmond Westland shop, we were probably doing 600,000.

[B]

Yep. And does your wife have a job or did she have a job?

[C]

No, she and I just shared.

[B]

But you had the side hustle. That was.

[C]

Yeah, correct, exactly. So we had the side hustle, which kind of both supplemental and kind of kept things warm. So she and I just kind of tag teamed and. But so by, so 2017 rolls around, by all, you know, on paper you'd say, well, this is going pretty well. And it was. But again now at this point, we had four kids. So we, we had a child and actually, no, no, that's not true. We had, we had two more. So we had five, which is, which is a lot. I say, I say that you start basketball. I, I say that. And yet we actually have seven now. So I'm like, I'm like, wow, Eric, five's a lot. You should, the follow up should have been, how many do you have now? More than five? Yeah, you actually have seven now, but at the time we had five total and four more.

[B]

You have football team.

[C]

Yeah, exactly, exactly. Yeah. And so, you know, so 2017 rolls around, but still it's, it's a major. I mean you're emotionally invested. It's psychologically invested and it's, it's, it's not, it's still not easy. And so even then I was thinking, is this, was this the right decision? Even though we're in the black and percentages looking decent and you got a manager inside and it's still, it was still so, so profound. And I was still, we were still, we were still discerning, like, is this really it? Like forever? Well, at this, at this critical juncture where I was like, Lucy, I just, I don't know, I, I still ponder, should we. We've done pretty well with it. Should we just put it up for sale?

[B]

Yeah. Make. We turned it around. We totally, we have the books. We have totally some. We have something that is sell totally.

[C]

It's now the upward.

[B]

You took an asset, you put data to it, you proved the concept, now you have an asset. Right?

[C]

So we're like, we can sell it for a decent profit and maybe I can go back and do audit and maybe that's maybe.

[B]

So that was path A.

[C]

That was path A.

[B]

What's path B?

[C]

Path B was we get a phone call, a cold call. I say cold. I was warm, technically. But a guy called me Vinny. Vinny Shira is his name, and he was a landlord developer working on a project in the Heights, which is our second location. As he called me and said, hey, a couple of people that we know in common have been kind of planting a seed about you and your concept. We've been looking for a. A bakery, cafe, slash.

[B]

This is the beautiful stuff right here.

[C]

Oh, yeah. So you don't.

[B]

You don't go chase opportunity. You attract it.

[C]

Yeah, that. Bingo. I couldn't say it enough. Right. And so you attract it. So again, I had these two people. Matt Toomey, who was formerly with Boomtown Coffee, had been planting this seed. And then my. My good friend Peter was cousins with Vinnie, and so Peter had been planting the CEO. So unbeknownst to me, these conversations are happening out there in the ether. Right. So. So Vinny calls me out of the blue and was like, hey, we don't know each other, but we know people in common here. We got this project main at Maine. It's a Yale Heights in 11th in the Heights. Heights Boulevard, 11th in the Heights. And he's like, hey, you. You're kind of our first pick. Would you be interested in opening location? Drive through needs to have a full espresso bar. Now, mind you, we had no espresso experience. Just drip.

[B]

And you can learn a lot of that stuff.

[C]

Yeah, we had no drive through experience. No espresso experience.

[B]

Even the manufacturers will send somebody out and, like.

[C]

Sure, yeah. And so we. So that's a Lucy night. This is literally a phone call happening within a week of us saying, I don't know, we're at a crossroads. Should we just sell it? Right. We get this phone call from this guy saying, do you want to double down and expand?

[B]

But they're probably looking for operators, too, not just a concept.

[C]

Totally, totally. They did not want to chain. This is the Heights. They wanted, like, local.

[B]

I think we should see more of that.

[C]

I. I wish we did.

[B]

And you kind of struck a chord with me earlier. When you're talking about, like, you don't realize what you have until you leave.

[C]

No, exactly.

[B]

You realize that there was something special about where you were from.

[C]

Exactly.

[B]

And I think that we're losing that regionality. Like, it's like, you know, like, you go to certain markets to get the best of something, and I think that I think that that's culture. That's history, you know, and it's. It's like those organizations are struggling to make it right now.

[C]

They are. That's sad. And that this is, this is. I think it transcends the food industry too. It's just. It is sad. But, but we, we very much are trying to, you know, not only live in that regional space, but to like, to. To exemplify it.

[B]

Right.

[C]

And to be like, well, you know, all about, you know, Texas and this specific nostalgic pastry that came over.

[B]

Settlers.

[C]

The settlers brought their culture. Their culture tweaked it a little bit. Exactly.

[B]

To Americanize it with the savory.

[C]

Yes. It's why we still sell poppy seed, which apricot. And by special order, we'll do prune and cottage cheese. And because we. We know that's 50, 60 years ago, that's what you were having.

[B]

That's a history, man.

[C]

100.

[B]

You go to Europe, you travel around like, you eat their history.

[C]

That's it. Exactly. So. So all this to say this was a major, A major crossroads. And so we, we decided, lastly, we decided, We. We discussed and pondered for probably two weeks of just like, oh, my gosh, what are the odds that we get this phone call at the same time we were pondering, just saying, I don't know, maybe this is it. Clearly, you know, where we landed. We just thought we loved the Heights at the time. There was a great place called Revival Market, which was just like the quintessence of, like, local and high quality. It was like butcher shop cafe. They were just doing all these amazing things and still are. Yeah. Anyway, Chef Ryan Pera and Morgan Weber, and these guys are still amazing in the Houston scene. But anyway, so we decided, yeah, we're gonna do it. So we signed the lease in summer of 17 and opened in December of 18.

[B]

How many square feet was this?

[C]

1200.

[B]

1200. Did you already say that? And I miss it?

[C]

No, you didn't. No. So double. Double what we.

[B]

What we currently have now, the kind of like your staple, like, like ideal footprint.

[C]

100%.

[B]

Yeah.

[C]

Yeah. I mean, yeah.

[B]

Drive thru.

[A]

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[B]

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[B]

You own two locations?

[C]

Yeah. Yeah. So I should clarify. So I Lucy and I started the Heights. We owned it fully.

[B]

Yeah.

[C]

In 2020.

[B]

First location. The Heights.

[C]

No. Well, the New Look Greenway is our first location. That's Irwin's. We bought that from him. 2014, 2018, Open Heights. That's our second location. But in the fall of 22 we actually sold it and converted it to a franchise.

[B]

So that was our second location.

[C]

Right. Our second location is no longer our location.

[B]

Because he's now a franchisee operator.

[C]

Correct. And. But Dan, a long time employee, and his wife Catherine bought it for me. And so it's in phenomenal hands. They do a great job because they were steeped in the culture with us in those early days. And so, yeah, that was 2018.

[B]

You purchased 2022. You sold the franchise.

[C]

Correct. So four. I was four years in. We sold. We sold that. And. And then. So the one, the one we're filming this in now, which is the Memorial City is our newest location. And now. And now our second corporate.

[B]

Got it. So it was in 2020 where you start working on the franchise model.

[C]

Correct.

[B]

So in 2018, what was the vision like?

[C]

You.

[B]

Like, you were on the fence. Do we sell it? Do we try to scale it? Was. It always. Was the franchising always in the background?

[C]

Never. No, no. In fact, yeah, this funny I mentioned Dan, the guy who owns it now, but he actually was instrumental in even, like planting a seed because he had a, you know, I hire. I hire him in 2018. It's now like, I don't know, mid-2019. And we're. We're doing really well in heights, like, it's. It's booming. I'm like, wow, this is fantastic. And have a great team and the community is amazing. The numbers are phenomenal.

[B]

Almost double your profit.

[C]

Yeah, it's fantastic. But. And so Dan approached me. Dan had previously worked at a great high end bakery cafe here in Houston. And he was like, hey, I was already interested in doing my own thing one day, but this concept is kind of everything I would have wanted anyway. Would you be open to opening up one day to other people? You know, and not passive equity, but like partners? Right. I said, dan, I'll be honest, Lucy, and I've never ever thought about that. Not because, like, we hadn't thought about it and said, no. We just. It was so far out of our purview. We were just like, you're just trying to survive. We're just trying to survive. Right. We're just operating. Like, that's like. We're not. That's it. We're just like. I mean, two units is two units more than we thought expected to have ever, you know, so we're just operating. And here's this guy saying, look, this is. Your brand's amazing, your concept's amazing, your flow, your people. It's out of the goodwill. They just the history.

[B]

Yeah, that's actually one thing that didn't come out earlier in the conversation that I not like. And I was wondering if this is on your radar, that if you knew that it was a good business model, because, I mean, from the beginning, like, it's simple. You do one thing really well. Small footprint. Like, there's a lot of things about this model. Flour and water margins are good. And, like, it's a good business model. And I was curious if that was even on your radar or you just like kolache?

[C]

Zero. I just like kolaches. I mean, you know, you wish you had, like, a. More a professional response. It was just. I. I was. I was the person who. Person who comes to me now and says, I love baking cookies. I be like, do not go into business baking cookies.

[B]

But, I mean, this is a unique.

[A]

That's the other thing.

[B]

It's a unique selling proposition.

[C]

It is, it is.

[B]

And maybe it's not so unique in Houston, but it doesn't sound like there was a ton of competition in 2008.

[C]

No. 2000. Yeah. No, not really.

[B]

Not. Not 14 is when you purchase.

[C]

I mean, obviously there's the larger chain in town, but, like, as far as, like, what I'll call, you know, I. I call it. If you said to me, describe what we sell without using the word kolache, I said, it's just premium comfort food. I mean, obviously, you know, we're selling a nostalgic. Not unlike Pete selling, you know, these phenomenal, you know, fajitas and another.

[B]

I mean, kind of crazy to think that that is another Houston, like, historical item. Right?

[C]

Totally.

[B]

Because that all started out in fuzz, didn't.

[C]

Yes, yeah, yeah, exactly. So, you know, in some sense, Pete and I are selling the same thing. We're selling a high, high quality, premium comfort food. That's also true. That's. That's bingo. We're selling nostalgia, we're selling culture. But it's not just like, you know, we're not racing to the bottom. He and I are not. I mean, we're. We're. We're doing it. Right. We're doing. So. So.

[B]

Sorry, go ahead.

[C]

No, I was just going to say. So at that time, you're right. People in this niche, I'd say there was no one doing what we're doing.

[B]

Right.

[C]

You know, there was. There was the. The kind of bulk produced.

[B]

Right. So there was that person that scaled it.

[C]

That's right.

[B]

But in that time, the people that were staying true to their roots were starting to basically retire.

[C]

Correct.

[B]

And there was nobody. No new generation.

[C]

Right.

[B]

Coming in behind it.

[C]

That's right. That's right. So I. I'd say. I'd say that I did see that niche not being filled. So that's. In that sense, I'D say, yeah, I think it was a good, A good business opportunity. But yeah, it was. It was kind of half that. Half. Just. I mean, I just love this patient. Yeah.

[B]

I mean, as an accountant, cpa, I would have been curious if you knew that those numbers are gonna work.

[C]

No, I didn't. Yeah.

[B]

So. But Daniel said something that was it Daniel, that like, he said that this is always kind of what I had in mind. This has everything. And I wonder if he saw that, that it had lakes. Meaning it's something that could scale if you. If that was what you wanted to do.

[C]

Yeah, yeah, I. You mean Dan in the Heights, Correct. Yeah.

[B]

He said to you like he was trying to convince you to become a partner and he's like this thing. I've always wanted to do my own thing.

[C]

Yeah.

[B]

But this thing already has everything I wanted.

[C]

Yeah.

[B]

Which is, I'm curious, does that mean he saw the potential?

[C]

Yes, he did. That is correct. In fact, I would say in a way that really Lucy and I didn't maybe even couldn't. Like, we were just, we were in the weeds and just. It was like, like, you know, we're on the back of this, this wild, strong bull just trying to like hold on. Right. And do a good job doing that. And. And Dan was there, but a lot of his kind of mental capacity wasn't stressed out. You know, with the back consistency, he could sit back and ponder and be a visionary and say, look, I don't think you can see it, but this is really special. Yeah. Right. So that was kind of the first,

[B]

like, wait, 20, 18, 19.

[C]

That was 19. Middle of 19.

[B]

He approached me, he's planting seeds.

[C]

Yeah, plants a seed. And I was like, Dan, I've never even like thought of that. I wouldn't even said like, oh, this, this brand has such value. I knew that like, viscerally. Yeah. But here's the guy from the out. I mean, he's inside and outside. Right. He's inside the system, but outside of

[B]

like running it and purchasing the, the first location.

[C]

First gear.

[B]

Second gear is, I would say, basically, maybe that's the second location. And going into the idea that this is scalable, 2020, you start pursuing the franchise.

[C]

Right. So. Because that, that was. Yeah. So I was thinking, okay, at minimum, I don't, I don't think Lucy and I were ready at the time for a full business partner, like buying in. We, we. We like the fact that we know we own the llc, which is named More than Brad. Llc. More than what? More than Brad. Okay. We also didn't know what we would, what the entity would do. So we're like, hey, it's a bread, but it's also more than breath bread. So anyway, so all that to say that, you know, Dan approaches plants the seeds. So, you know, we, we thought, look, Frank, franchising, although it has a certain connotation, you think McDonald's and such, but it's just a, it's just a legal vehicle. I mean, yeah, I mean, you can be as small, as big as you want to be as a franchise, so it can be very closely held.

[B]

I think it's a great model, honestly. And I, I, I'll admit, in my more naive version, my younger self, I used to. Part of the idea of starting this podcast was to decentralize and democratize knowledge to help the independents compete against the big corporations in the world. And I always associated franchise with being something or associated with people that just want to.

[C]

I did, too. I did, too. Yeah. In fact, with you, I'd have said, well, it's, it's all going to be kind of soulless and like, about money and large. It could be five, five units, and you run it, like, run like a family.

[B]

To your point, all it is is a entity structure.

[C]

It's a legal structure.

[B]

Right.

[C]

And you could have. So every year, like, we're, that's every year. I mean, numerous times a month, we're all getting together and chatting about how we're doing. And like, Dan. Well, Dan's the one who creates our monthly drink specials. He's just amazing like that. So, like, he's creating the drink specials that, like, this month is the Biscoff latte. That's all him.

[B]

Yeah.

[C]

And like, we're out beating the bush to do a kolachi collaboration that he'll then use it heights.

[B]

And what I think franchising is perfect, perfect for is I think that there's so many different lanes in this industry, whether you're creative, whether you're like a technician, a chef or a bartender or a CPA or marketing now is becoming

[A]

more and more important.

[B]

There's so many hats you have to wear to be successful and to attract the best talent. I think you. It's more than a paycheck today. I think people want to feel like they're invested.

[C]

Literally.

[B]

They want to, they want to be vested in what you're doing. They don't want just collective paycheck. They want to be seen and valued, and they feel like they want to have a seat at the table. And when, when people. How do you get people to treat it like they own it?

[C]

Well, you mean the franchisees specifically?

[B]

Just generally speaking, how do you get people to treat something like they own it?

[C]

Well, isn't that the question? I mean, I would say you let

[B]

them own a little piece of it.

[C]

Yeah. No, like totally you.

[B]

How do you expect anybody to show up? The same way that you show up, up every day and treat it like you own it.

[C]

Yeah.

[B]

And I don't think you need to give away the house.

[C]

Sure.

[B]

But like you give them a piece of something.

[C]

Yeah, yeah.

[B]

And I think it's such, like there's this company out of Charleston Uptown Hospitality, and what they do, they're not franchise, but what they do is I think if you're with the company for five years and you've made a management position and you want to grow with the company, they will sell you 1% of whatever restaurant that you're working at and you become a partner. 1%. Maybe it's, you know, valued at a million dollars. You've come up with $10,000, you can be a partner and then maybe you're putting that, that, that profit that you're taking every year into a high yield savings account. You're just letting it build. You can apply another percent. Yeah, yeah. And before you know it, you own 5% of a company.

[C]

Yeah.

[B]

And you can then keep putting that profit away. And then as this company is scaling, you can invest. Invest or you sell.

[C]

Exactly.

[B]

But you get, you want, want people to show up and to be loyal and to, to treat it like they own it.

[C]

That's right.

[B]

I think we go further together. You don't let anybody in, but you vet people in, you know, five years anyway. I think franchising is another way to do that.

[C]

No, it is. And I think the challenge is, you know, if you grow too fast, too quickly, which, which we have not necessarily you, you can lose that pretty quickly.

[B]

I have thoughts on that, but I think we're not quite there yet.

[C]

Yeah.

[B]

In your, in your story.

[C]

No, no, no. In fact, in fact, a question you could ask is. Well, I mean, in fact, I'll just tell you. Do, do we think. Is our intent to just continue franchising? I would say no. No, it's not. In fact, I don't. We may never franchise again. We may. I don't know. I'm just saying people will say to. What's your number? What's your number? We do not. We don't have a number.

[B]

Who are you?

[C]

That's it. Who are you? What are you doing. And if that starts to change as you hit some magical number, it's the number that changes, not who you are. Right, right.

[B]

I think, I think franchising is good for people. I've noticed that like there are people out there that are creators. Right. And that's what they're really good at. They have ideas for concepts. They love the branding, they love birthing concepts into the world. And then they find the executive chef and they find the talent and they, they create opportunity. Those are restaurant tours, I feel like in the sense of like the traditional, like, like local mom and pop restaurant tour, maybe owner operator. But then there's the people that are damn good managers. They, you give them a system and they're great leaders and they'll manage the out of it and then maybe have a little bit of an entrepreneurial bug. But they're not necessarily visionaries, creators. I think they make great franchise totally because you give them a system.

[C]

Give them a system and say do this.

[B]

Well, exactly. They have that structure and they're going to execute the crap out of it. And it's an opportunity for somebody who's a manager to now own stake in a business or to have equity in something.

[C]

Yeah, right.

[B]

I think that's a great model for those types of people. If you're not necessarily creators but you are a leader in a phenomenal mentor coach, like those are all characteristics. What are your thoughts on that?

[C]

No, I think it's 100% and 1. The caveat I have there is, you know, we started off doing more just like, you know, kind of one off, one unit franchise. Right. No restaurant background necessarily. Just people who are passionate and excited. I don't think we're going to do that again. Not because we don't believe in, you know, you know, Joe Blow and Susie Q, but because we know how hard it was having no background. And so we've seen that be hard for others as well. Even with a system. Right. The fact is, even with this system, in fact. Oh, actually listening to you to Pete's episode with. Yeah, Pete, exactly. Moore's episode. And he said, you know, I think give a damn was one of his. Yeah, his mantras. And, and he said, you don't need to, you don't need to go past page two of our 300 page manual if you, if you don't give A damn, the 298 pages aren't gonna mean anything. I'd say the same thing. So I'd say, you know, you got to give a damn. But also you have to know how. Know how to give a damn.

[B]

Does that make sense also? Like, ignorance is like, you don't know what you don't know.

[C]

Precisely.

[B]

Maybe you think you want it, then you do it.

[C]

Someone who would say, look, I, you know, you know, I. What I wouldn't, what I wouldn't want. If someone is like, Look, I've got 300 subways. I want to open up five of your concept. Not a good fit. Right, right. You can't, you can't mentally, you know, apply the mentality of 300 subways to like what we're doing here in Houston. Okay. But maybe you've owned your own 1 or 2 or 3 or 4 or whatever in the Houston area. They're in Texas, you're from Austin or whatever. And you're like, hey, I already own whatever, a bakery, cafe, a coffee shop and a sandwich shop in Austin. Right. For 20 years. We're doing really well. Love what you're doing. We want to open up in Austin. That's a conversation I would have. Right. Because, because you'd have the operational. Know how you've cut your teeth in the industry. You know how hard it is. Right. But the culture would be lost on you. Right. That makes sense.

[B]

And I think you're doing it right because you're scaling in the heat. Houston first five locations in Houston.

[C]

Well, one's in Dallas. Yes. Four in Houston, one north of Dallas.

[B]

But you look at like P. Terry's and what they did. I love how he scaled.

[C]

Yeah. Out of Austin. Exactly.

[B]

I think they're at 20, like seven locations before they ever left the Austin market. So, like in and around, like the, the suburbs of Austin. Yeah, they, they scaled and they finally moved out of the, the, the, the Austin market and they went all the way the San Marcos.

[C]

Yeah, I know. Right.

[B]

Which for those who don't know is like a 30 minute drive south. And then they went to San Antonio.

[C]

I think they're Houston now, are they not?

[B]

Yeah, they are in Houston. But I mean, I think they're now like in the 30s locations, but they're still hyper focused, so.

[C]

Right.

[B]

You can make really good money if you own 30 restaurants. Totally. And you can have an impact on a community.

[C]

Yeah.

[B]

And do really well. Like, what's the incentive to scale to, to a thousand locations.

[C]

Yeah.

[B]

At what point is that thing that was magical gonna lose its magic?

[C]

No, I, I would. This, this is a great, it's a great. I, I love this topic. So I'd like to expand on. Please expound on this a bit but there's this. There's this quote I've. I've heard before, which is, you don't. Don't chase your first dollar. Sorry, sorry. Don't. Don't chase your millionth dollar like it's your first dollar. Like, at some point as a human. Forget restaurants, forget. Forget all that. Just like in general, as a human, you're chasing your first dollar. Especially if you've got a young family, you better chase that first dollar like it's. Like it's bread and water. Because it probably is bread and water, right? Like that's the electricity bill. That's your clothing on your kid's back. Like, yeah, you guys. You chase that $5 security life. Yeah. Right. Your millionth dollar or two millionth dollar, whatever. Probably you need to pivot, right? Because if you're still chasing that millionth dollar or whatever that number is for you, like it's your first. I don't know. My humble two cents is you've probably missed something.

[B]

Right?

[C]

Right. As you. As you go on this. This arc of your career and your life, you need to be pivoting all along. So what I would say is. Yeah. My thought is, why, why. Why chase that millionth like it's your first? I don't think you should, but it begs the question. You mentioned the word impact, which I like you. Right. Let's say you're the kind of person who says, look, I. I'm not going to chase the millionth dollar like my first. However, we had something special, and we think we could really positively impact communities with 30 units of PTARIs, not two. Probably at two units, he and his family. I say he. Whoever owns. I don't know who owns it, but like that. That man or woman who owns Pteries might have made a. Patrick Terry, by the way. Okay. Okay. Well, Patrick probably two units might have said. Said, I can make a fine living off of two. Right. But maybe he's. Maybe he's made some great splashes in the water, so to speak, and has raised them. What's the phrase? Or the rising tide raises all boats. Right.

[B]

And he's keeping all that in that community. And like that Pete Terry's brand is synonymous with Austin.

[C]

Right. So I would say that to me, is the tension, right. That's the tightrope, Right, Right. Because the fact is, if you start to expand that. And yes, maybe 25 and 30, you're just expensive. Expanding goodness.

[B]

Right.

[C]

In that case, I would say probably keep doing it. Right. But at some point, that's. So at some Point that's going to pivot and you might lose your way.

[B]

Well, I call it. It's chasing reach versus impact. And if you have energy, you can either put it out or you can put it in.

[C]

Right.

[B]

And when you put the energy in like you've done.

[C]

Yeah.

[B]

The, the opportunities start coming to you.

[C]

That's right.

[B]

There's the option to start putting it out. What happens is, is if you still continue to put that energy in and you go deeper and deeper and deeper into that community like that like you will. I mean a big gust of wind can come and blow away a shallow rooted.

[C]

That's right.

[B]

Like feel of like grass. But if you have.

[C]

That's right.

[B]

Force. A hyper central force of like deep birch, like old birch. Like those things aren't going anywhere.

[C]

That's right.

[B]

You know, like they're.

[C]

They're rooted.

[B]

Roots are deep and it has lasting power. And it's just. I don't know, it's just better. Yeah, I think it's better from like human needs perspective.

[C]

Right.

[B]

But I want to get into like the nitty gritty. I mean, I love the conversation. Where we are right now is usually where I end up. There's so much we can learn from your story. In terms of franchising, you have three franchisees, correct. In your organization. Yeah. And that's three different partners or like.

[C]

Yeah, three different franchisees. So you got a husband and wife in Salina, which is north of Dallas.

[B]

Okay.

[C]

You got a husband and wife. And actually they're all husbands and wives. I'll just stop saying that.

[B]

Got it.

[C]

Operators in Pearland.

[B]

Okay.

[C]

And then Dan and Catherine, who against Dan started with. With corporate, then bought in 2022 and.

[B]

Okay, got it. So in terms of the franchising model, I mean how deep have you gone into really? Like, I mean it's. You're so small scale franchise. Are you like really putting a lot of energy into that? Those franchise systems?

[C]

We did, we actually hired a consulting firm.

[B]

Who'd you go with?

[C]

I think it was called Turnkey.

[B]

Okay.

[C]

Systems here in. Here in town. But we put our money where our mouth was. Because what we didn't want to do is you'll have people who say I want to franchise, but we'll nickel and diamond and nickel and diamond. And basically you're a horrible franchisor. You can't offer good support. You don't have systems to provide. It's just, it's just window dressing. And we're like, we're. If we're going to do it we're going to do it for real and be a good partner. So we spent again a pretty penny to have manuals and systems and this company came in and they were good at documenting everything, you know, videos and pictures. And so we did that. We then of course provided that to the all three franchisees. Go ahead.

[B]

What is like the continued training like look like and like this, the continued support. So an analogy I love is, you know, restaurant owner is to employee as franchisee or sorry franchisor is to franchisee. So as you become a franchisor, your role shifts to solely focus on developing franchisees where you're to your point, you're hyper, you're building your bench, you're building your network, you're not letting anybody in. You really have to be of our DNA, instill our values. And you're just like you hire, what is it? Hire slow fire fast.

[C]

You're.

[B]

It's the same mindset with the franchisees where like you're really being selective on who you let in. It's not just about paying the dues, right. It's about are you one of us? And then you develop them, you train them and you're. And your job is to then exist to serve them. Are you there or because you guys are so hyper focused local. Is it more through osmosis?

[C]

More through osmosis. And I'll be clear, like when we, when we onboard them there's a formal training process and they spend weeks, sometimes even months training at a. At the time it was our height location and our Greenway location, kind of doing both. So heights that got kind of the drive through and espresso and Greenway was kind of just old school customer service and going through all the training programs and whatnot. Ongoing. It's more osmosis. So it's a regular communication.

[B]

When you're small you can manage precisely.

[C]

It's very. Right. It's very familiar. Like it's not like oh, you're you, you're unit number 78. What's your name again?

[B]

They're like we, there's 10 of you, right?

[C]

Exactly. Yeah. So we, we're all very friendly and familiar and we know each other and so questions pop up. We're kind of cross pollinating.

[B]

There's 10 of you and the furthest one away is three hours, right?

[C]

Yeah, exactly. Exactly. Yeah.

[B]

So what has the continued evolution been? We're, we're in the timeline 2020 right now you started franchising you since 2020 you have opened, you had two locations. One became a franchise.

[C]

Yep.

[B]

You opened two more franchisees.

[C]

Yep.

[B]

Or you partnered with two more franchisees. One in Peach Land, one in Dallas.

[C]

Yeah. One in Parand, one in Dallas North. North Dallas. Yeah.

[B]

My fruits convert.

[C]

That's all right. No problem.

[B]

And then this location, the fifth location is your second, technically third but current second property that you own.

[C]

Exactly. Yeah. Good summary. So, and to be clear, I also decided to partner with a long time employee, Michael, who's my director of operations. Otherwise. So he's helped me run more than Brad and College Franchising llc. But you know, I hired him just as a, as an hourly employee. And just very, very quickly. I think this like not unlike Dan. Right. Dan was also just hourly.

[B]

And your job as a restaurateur is to provide opportunity 100.

[C]

And that's not doing that. You're really not succeeding.

[B]

Yeah.

[C]

Regardless what the numbers are. So Michael, just.

[B]

You're doing it right, man.

[C]

Well, I appreciate that. Thank you. So Michael, who is now a co owner of this location, this is. So this is his first ownership stint. Heights was Dan's first. First ownership stint. But I, I love, you know, my thing is I'm not like I want new ideas. I want, you know, I'm 47. Those guys are like 31ish. I, I want new ideas and new thoughts and new blood.

[B]

You know, I'm gonna, I'm gonna go back to the, the shifting. The gear analogy.

[C]

Yeah.

[B]

I'm gonna, I'm gonna change the shifting points though. First gear was opening.

[C]

Yeah.

[B]

Second gear was dialing in the systems and processes.

[C]

Yeah.

[B]

Third gear was opening a second location and eventually getting to the point where you're franchise.

[C]

Yeah.

[B]

Right. Fourth gear is where you are today.

[C]

Okay.

[B]

So how has the business changed since 2020 to really ramp things up, to fine tune things like what is the evolution, what are the pain points been from whatever that point was in 2020, 22 to where you are today?

[C]

Yeah. I would say, you know, earlier I was describing what it was like going from the idea of a restaurant to like owning it. It's just there's so much that you don't know. You don't know. You mentioned that phrase earlier. And so you know, you get into it, you're like, well, this is, this is different and harder and this isn't working, but this is working. And I would say similarly becoming a franchise, becoming a franchisor was like this, like that you get to this new thing and you don't know what you don't know. And there were some real difficulties. You Know what was the challenge? New markets. I mean, actually, what I didn't say earlier was that actually we had a unit in Kingwood, which is north. You susten. That actually didn't. Didn't work. It failed. I say we. There was a franchise. You know, the franchisees were good people, but it was a combination of. Granted, this is kind of shortly after Covid. So this is like 2023 ish. So still, I mean, are you working

[B]

with a broker, somebody who knows the marketplaces?

[C]

Do you mean to find the location? Yeah, well, yes, we do, yes.

[B]

Are you using any tools like I can never remember the names of the tool tools that are out there to help you run like market diagnosis to see if your target market's there and if it's the right.

[C]

Yeah. So it. So we had a broker who was kind of probably had access to these kinds of tools. It was in a center with Heb and you know, it checked some boxes. At that time, we had never opened up in a suburb at all. So like that. That was also a big question mark. How does this. Because that's, that's the thing too. There are brands. In fact, there. There are brands I know in Houston. I won't name them, but like this great high end bakery. The owner and he said we do great, great inner loop, but we open up one in the Woodlands and it's ho hum, you know, but on paper, right? On paper you'd see, well, traffic's there, the household income is there and all the. It's there. But something wasn't there. Right. Because they opened up and you know, same with restaurateur and Katie. Great, great inner Beltway went to Katie. And so I'm not saying this is the case for everyone. I'm just saying Kingwood was a combination of that factor. Two was in a strip center kind of offset. Three of the operators, you know, had some experience, but not again, not, not much. And just I think for them it was so different than what they expected. It's just, it's just hard. It's grunt work in the beginning.

[B]

Everything is, you know, if you're batting.500, you're doing phenomenal.

[C]

Right? Exactly. Precisely. So I would just say there are a lot of factors that came into play there post Covid operators, you know, different than they expected. Location, you know, our brand. How does our brand do in the suburbs? So that actually failed. So paint pain points. Yeah. Shutting a franchise unit down. How'd that feel? Horrible. Yeah, yeah, horrible. I mean, like gut wrenching for, for all the reasons I mean, for my brand, gut wrenching for my fan, for my workers who are now like, what's going on? For the, for the prospective franchisees in the pipeline and especially for the, for those operators.

[B]

The investors.

[C]

For the investors. Right. It just, it was just all bad. It felt horrible. But I mean, like a lot of things in life, you just again, you just grin and bear it. You just, you just do it. You do all the things. You try to be a good steward of the wind down. Even though it feels.

[B]

Yes. More custom.

[C]

Horrible. Again, good issue. Yeah. So, so. But they get that wound down and, you know, we all, we just kind of, you know, we part ways and then amicably, I'd say. So I would say where we're at now is, you know, if you said to me, as we were becoming a franchise, if you'd said to me, how many units do you want? I still would have said, I don't know. But possibly 10, you know, I don't know. Nice round number.

[B]

I mean, you do. You got 10. You're averaging, you know, if you're, if you're doing. You said your, your best location is in over 2.

[C]

Yeah.

[B]

2.2.

[C]

Yeah.

[B]

So you're averaging a million or 1.5.

[C]

Let's say a million. Let's say a million. Right.

[B]

Maybe you're getting a cut of all that. Like you're going to have security.

[C]

Right. But I'm just saying, like, you get into it and it was so different than we expected right there. Right now, I would say, well, big time out. Like, we kind of, kind of pause on franchising. So what we want to do now is really two things, is focus on this new location. So Michael and I are really hammering it here and making sure that this one has good, strong legs, a good team, the culture.

[B]

Right.

[C]

And then the second thing we're doing is focusing on the existing franchisees. So.

[B]

Right.

[C]

So parlance the line on heights.

[B]

And I think the challenge or the pushback that people would give is, you know, like the pain points I've identified is obviously opening your first location typically around three locations. Things start to get really hard and you have to change your business model a little bit. You got to start hiring more managers.

[C]

Right.

[B]

You have to start putting more people in.

[C]

In.

[B]

In between you and the business. You have to ascend the hierarchy and all. As you ascend, you have to. You're creating this void and you have to move people into those voids. And that takes resources. So, yeah, the challenge is you got to build the house before you move into it.

[C]

That's right.

[B]

So as you're trying to scale, you hit these points where you might have to go to the banks.

[C]

Yeah.

[B]

Earn some money. But then you get to like 10, 11 locations. And that next point of evolution is you need to C suite. And those C suite MOFOs come with six figures exactly, you know, and you need 10 of them. So that's when private equity, 100%.

[C]

It's.

[B]

I get it.

[C]

Yeah, it's. It's. I think you're rock climbing. Like, you're. Wherever you're at on the wall, there's always going to be some point where you're like, I've now got to let go of this hold to get to this hold.

[B]

Right.

[C]

You know, early on, you're like, I can just like grab on and go. At some point, you're like, I got to let go to grab on. So. So all these inflection points, you know, the C suites, and it just, they're all hard. But the question for me is kind of like, okay, how far do I want to go? And I, I would say, personally, I don't aspire to, like, I don't even. I don't aspire to 10 anymore. I don't aspire to. For us, it's like, okay, what, what's the value that. With the 56 years of value that

[B]

we have here, Houston is a big market.

[C]

It's a huge market.

[B]

So you could have 10 locations within 10 mile radius.

[C]

Easy, easy. And so for us right now, it's all about protecting the value.

[B]

Maybe not 10 miles, but at least 30.

[C]

I get. You get your concept. Yeah. So like protecting the people who are currently part of the system, supporting them. And that includes workers, franchisees, vendors, whatever, My, My family, my. My partner's families. Just making sure that we're like, really doing well by them. And what I would say is kind of like heights happened, you know, just recently we got a phone call from someone who was like, and I'll keep this kind of vague, but another restaurant concept in town, Quick Serve, that was like, we'd love to partner with you. We're building, building a flagship store in Cyprus in 2028. We love to go. So we were up there a few days ago, Mark, Michael and I kind of looking at what that would look like. So all this to say, you know, you become. Your concept becomes attractive to people and those opportunities will probably come.

[B]

You don't look for opportunity, you attract opportunity. Right.

[C]

So I would say we've already seen that happen and happen Happening. We're also big on collaborations. You know, we. We partner with restaurants on kind of monthly specials. So, you know, our name is out there. I just. What we're not doing for sure is actively beating the franchise bushes.

[B]

Right.

[C]

We're just. We're not doing that.

[B]

And I think one thing, one. The whole reason why we take the time, we go through the exercises of writing our mission statement, of writing our vision of having core values, is those things become filters for what we do going forward.

[C]

Yeah.

[B]

And if it doesn't fit through that filter, if it's not a fuck, yeah, that's a hell no.

[C]

Right.

[B]

You know? And, like, does it match? Is this opportunity on trajectory with where we want to be?

[C]

Totally. Yeah. It's funny, just. Just this visit on Friday with this other restaurateur, right. I said to me, look, I said, I'm 47. It's a mature entity. I said, we don't. We don't need to do anything else. We're doing just fine. So I said, I give a lot of no's. Right? A lot of no's. I'm not saying there aren't some yeses out there. And I said, who knows? Maybe you're a yes. I don't know. We're not there yet. But like, like, I just think, yeah, you should be saying a lot of no.

[B]

I'm not saying no. Our vision saying no.

[C]

Right. No, exactly.

[B]

You know.

[C]

Right. And it's like, as you said, the filter. Right, Right. I'm not saying no. We're just going to put it through the filter and probably not going to kick out.

[B]

Just like you're like, you know, correcting an employee. Like, hey, like, I'm not correcting you. I'm correcting the process. This is the documented process.

[C]

Right.

[B]

Here's how you're doing it. If the way you think you're doing it is better, then let's take a look at it. But right now, until you prove to me that it's better, do it.

[C]

There's some dissonance here.

[B]

Yeah. And like, I'm not correcting you, I'm correcting the process.

[C]

Yeah.

[B]

And like, we need to stay consistent. Like, it's the same mindset, but that's why we write things down, to keep us honest.

[C]

Yeah, true.

[B]

You know?

[C]

Yeah.

[B]

So. Oh, I had a train of thought and I lost it. So let me. Yeah, you're a tech person, so this is something I'm kind of chomping at the bit to get into. So we're kind of at the story where we. We are. Where we are today. You know, like, we've gotten some, like. Where you are today. Five locations. We've unpackaged how you got here. We've unpackaged your biggest challenges. What is your. I guess let's start with like your organizational structure. So you're the CEO of the franchise.

[C]

Yeah, Culture Franchising llc. Lucy and I are owners of that.

[B]

Yeah.

[C]

More than Bread llc, which owns just the Greenway, which is the Richmond Westland location.

[B]

Three couples that are partners. Franchise.

[C]

Yeah, franchise. Exactly. And then finally, Michael is a partner in this one corporate entity. Got it.

[B]

He's the coo.

[C]

Correct.

[B]

So.

[C]

Well, I mean, he's. He's technically co owner and partner of this location. So he's director of operations for every other entity.

[B]

Right.

[C]

And co owner and co founder of RH MH Hospitality, which is Randy Hines, Michael Horn.

[B]

Got it. So in terms of like, like C Suite or like, is there any other business, like not business, but role within this business that you guys have marketing,

[C]

things like that, knowing as you know, we've got great. We outsource our, our PR and marketing. And so we have the Kimberly Park Communication. So shout out to them. So basically I would say those major roles that you can think of, bookkeeping, outsource, you know, tax accounting.

[B]

Are you still your own accountant or have you outsourced?

[C]

No, no. Yeah, Years ago, I stopped doing that. Yeah, that was, that was a win for everybody. Yeah, I did it the first couple of years, but. Yeah.

[B]

Is it a CFO or cpa? Like what?

[C]

Yes, it's a tax cpa. They also have their own bookkeeping arm.

[B]

Got it.

[C]

And so they kind of do all that for us. And so I like that that they're tax guys that talk to the bookkeeping guys. I'm not worried about, like, you know, things being dropped.

[B]

Is it like, do you. Do you mind sharing who that is?

[C]

No, yeah, It's a. It's JCCPAS. So JCCPAS.com.

[B]

got it.

[C]

John is the CEO and founder and a friend of mine has his own home building company and they use them and I was already looking to switch, so we've been very happy with them so far.

[B]

Yeah, I think that there's a huge shift going towards fractional CFOs.

[C]

Yeah.

[B]

And like, to your point, one stop shop for bookkeeping CPA. I think the third leg to that would be the cfo.

[C]

Totally. We don't, we don't really have that. I, I think we're in the market for it. Yeah. But.

[B]

Yeah, you got a great opportunity right here in Houston. Supporting services. That's who Dustin and Teague uses.

[C]

Oh, fantastic. Yeah, yeah.

[B]

They had a phenomenal things to say about.

[C]

I think Roostar also uses them.

[B]

I hesitate. I hesitated to ask a s a current sponsor, but I'll be. I'm gonna be frank. I got to be better about not censoring the content. I don't want it to be transparent. Love my sponsors, but at the same time, I gotta stay open to the other possible.

[C]

As you said, Houston's a big market and my guests actually, actually know the people at Sir Bon. I'm sure they would say, look, we know they're great people. Look, there are other good kachis out there. Kevin Dowd at original Klochi Shop. Go visit him. Yeah. Doing a great. Doing a great job. Like there's enough room. Right.

[B]

So what else do you outsource? You outsource bookkeeping in taxes?

[C]

Yeah, bookkeeping, taxes, pr, social media.

[B]

PR and social media is at the same. Under the same roof, or is that separate?

[C]

That's all Kimberly Park Communications, they do all that.

[B]

How long you've been working with Kimberly park?

[C]

Since probably summer 22.

[B]

And how long have they been around?

[C]

Oh, gosh, I don't know. Decades.

[B]

Are they local here to Houston?

[C]

Yeah, they just have a great team. Yeah. It's funny. Speaking of abcd, so she. Isabel. Isabel is the person that works on her team. And Isabel used to be freelance and did you know, did a short story for us years ago, just coincidentally. And she came in the height shop years later and again, didn't know I was looking to switching PR firms. And I'm like, hey, how's it going? It's been a while. And where are you at now? She's on with Kimberly Park Communications. Well, give me your contact. And that led to some conversations, and now we've been with them since. Yeah, 22.

[B]

What Impact has been partnering with a PR company like Kimberly park done for you?

[C]

Gosh, I just. I mean, it's kind of like, what has it not done? I mean, first and foremost, it just frees me up. Like, I just. I don't.

[B]

That guerrilla marketing is now delegated.

[C]

Yes. Yeah, yeah. They're still, you know, you can still

[B]

be part of your community.

[C]

Here's what I get to now choose. Choose. Right, Right. I get to choose what I'm going to be doing. Whereas in the beginning I'm like, you don't get to choose. You just do it all.

[B]

I'm happy you brought this up because you said earlier, say yes to everything.

[C]

Yeah.

[B]

And I think that. I think you were talking about something else with like opportunities that come to you.

[C]

Right.

[B]

Eventually you have to be able to totally. As you get that clarity on who you are and where you're going, those yeses have to start turning to no's.

[C]

100. That's the filter you're describing in the beginning. You don't even have a filter. Like what would they find out?

[B]

What North. Where north is.

[C]

Exactly. And once you get.

[B]

Yeah, oh, there. The sun sets over there.

[C]

So. Okay. Exactly. So that becomes your filter.

[B]

Yeah.

[C]

So now there are some NO's. Marketing nodes. PR knows and story knows, you know, but. But there's. But again, they. They're kind of. They help with that too because they know who we are.

[B]

They communicate who you are.

[C]

Yes. So I'll send them an opportunity to say, should I do this? Like that's. No, not really in your wheelhouse, you know, or. Or definitely jump on that.

[B]

So they serve as a filter.

[C]

100. So. So they let me then pick and choose what I want to do and good. What I'm good at. So they're my filter. Number two is they just. They. They're great about connecting us with people. So they know tons of people in the city and they just are not. They're very generous with connecting us with people, whether it's media people or other restaurateurs or collaborations. And it's been fantastic.

[B]

Yeah. And anything else you outsource?

[C]

No, those are kind of the main things I can think of. Yeah.

[B]

So let's get to Tech Stack. Where are you today? I mean, I know you're using toast.

[C]

Toast, yeah.

[B]

You're sticking with Jolt.

[C]

Yep.

[B]

Does Toast have their own built in checklist system?

[C]

Yeah, I'm pretty sure they do. You know, Toast has grown tremendously in the past.

[B]

When did you start with Toast?

[C]

We started with them, if I recall correctly or correctly around 2020. Okay.

[B]

So was that a thing that came out of the pandemic that you had to do more online ordering?

[C]

You know, I honestly don't recall for sure. I do recall we were with Shopkeep before, which worked fine in my previous location, but we were having glitches at the Heights. Heights was, you know, like doing like significantly more than Greenway was. And so the tech that worked at one location was just being kind of hammered and was not really doing great. I'm not faulting Shopkeep. It just wasn't a good fit for us there. And so we looked at a lot of different systems. But I think part of it was like the online ordering, which was huge

[B]

in 2020 when we moved.

[C]

Huge. So if I recall correctly, it was kind of a combination of, hey, we're having these like latency issues and like weird shopkeep glitches coupled with we need to be online like now. So we just switched to Toast and got the hardware and hired a consultant to help us like put it all in. And I would say it is not often I can say we went with this whatever and have been happy for years, but Toast has been pretty awesome. Yeah. Again, Kimberly Parks, you know, just haven't looked back. And you know, sometimes you just, the way I say it is, you just throw things at the wall. Some things stick, some things don't. And so you just know going into it that you can't have analysis paralysis. Like you just have to move.

[B]

Yeah.

[C]

You got to make decisions, be decisive, be okay with failure. Right. Be okay with losing money or losing time, losing energy. You just have to keep going. But it's a great feeling when you make a decision and you're like, man, that's, that's a four year success.

[B]

So are you using what other features that are available to you with Toast? How many of those features are you using?

[C]

Well, to be frank, really, none of them. They got a lot, they got a lot of bells and whistles, but you can bolt on. I say none of them. That's not true. We use their, like their integrations with UberEats and Door Dash. We use that. They have a few other integrations, but they've also got like, I don't know, menu, menu max and inventory and payroll and general ledger. And they have all that Chef 10.

[B]

Right.

[C]

Chef tag.

[B]

I don't know if they're technically general. I think they're working on making that kind of a general ledger. I think it's more of like inventory management, cost, like recipe costing. I don't know if it's actually a general ledger. Are you using QuickBooks?

[C]

Yeah, QuickBooks Online. But like Extra Chef. I feel like that was the thing they purchased and yeah, maybe that's integrated and yeah, we just, we, we just. Partly because we weren't already doing that when these things came available, we're like, does it make sense for us to do it? And we just don't. And again, I'll be transparent and say, you know, your best operators are doing like weekly or at least monthly, you know, hardcore to the penny inventories. And we just, from the old days weren't. And we, we still aren't. I'm not saying that, you know, what's the phrase? Do as I say, not as I do. So to all you prospective operators, do it, get in the habit of doing it.

[B]

What's stopping you from doing it?

[C]

You know, the thing is, we clearly, month to month, there's going to be some float. Right, Right. And so some purchase you make at the end of the month going to show up in the next month, you know.

[B]

Right.

[C]

You know, what's stopping us is it would take it just inertia, you know, it would take some extra time and money and effort to, like, do that. And so every. Every month and quarter we're looking and we're like, well, we've got a pretty good handle on our costs.

[B]

Cash flow solves a lot of problems.

[C]

Cash flow solves a lot of problems. Right. So. So part of it is like, look, you know, would it be better to do it? Yes. Is it to us worth the extra effort and the pain to do it? Not. Not yet. I'm not gonna say never. Yeah, but not yet.

[B]

I think that's a big reason why I'm an advocate for the fractional cfo, because with all the software that's available today, they're not just helping you with like the, like looking into the future and strategizing. They're experts on the software.

[C]

That's right.

[B]

And a lot of what, what keeps operators from adopting the new software is the lift that goes into getting that onboarded. It takes people upwards of a year to go to get going with it. So if you have a, you know, if you're not necessarily going out and hiring a consultant for a hundred thousand dollars, but you're onboarding a fractional CFO for, say, anywhere from 2 to $5,000 a month, depending on your operation, then that is a budget that you have. It's an extension of your team and they're going to onboard the tool for you and then they're going to hold you to it.

[C]

Yes.

[B]

They're going to be like, did you get your inventory? Like, you're missed. Like, did you scan the invoice?

[C]

And not just. Did you do, like, here's how you do it. I'm going to come. I'm going to come and we're going to like, I'm going to show you how you do this.

[B]

Right. And then, sorry, keep going.

[C]

Yeah. And that's just kind of the physical side. Right. Here's how you're going to count and log in the system. Here's how you use it. And this is what I'm going to be doing once it's all in.

[B]

Right. So the other cool thing is if you have a, if you do this and you hand it off to a general manager or whatever, they're going to start to drift from how you did it.

[C]

That's right.

[B]

They go somewhere and then somebody else comes into that role. They're going to drift. And over time you just have this cluster of a situation, but when you outsource it to a firm that has a way to do, they hold the line, there's no turnover and there's consistency and it stays so much cleaner. Yeah, I, I really do think that fractional executives are going to change the game for independence because it's going to help bridge, again, bridge that gap. The technology is helping it, making it so one CFO or one coo, fractional CEO can be in one spot and have multiple clients because it's all cloud based.

[C]

Right.

[B]

And it's consistency. So it's interesting times.

[C]

You know, I loved your point about the software because the lift, that's, that's one of the big inhibitors for us. It's like, like, do we have, do we want to go learn a new system? To your point, if we ever wanted to do it, the answer would be no. We're gonna go find someone, Right. Who's an expert at that system and will help us and implement. So who knows, that might be initiative this year.

[B]

That's a great business opportunity, by the way. If you're somebody out there listening to this and you're the COO type and you love technology and you're, yeah, totally, R365 or restaurant systems Pro. Just go out there and help people on board and then give them systems. And that alone is like, if you just become an expert in that, there's an opportunity for you to be a contract worker onboarding Enterprise solutions.

[C]

When I used to consult back 2014, 2017 as an auditor, my, the CEO I worked for used to say, look, we got to find all of our clients the hammers, right? Because there are hammers hanging over their heads ready to hit them. He's like, that's, that's where our opportunity is that because our clients will pay money to resolve this hammer hanging over their head that's supposed to like fall and hit them. And so I would just say the same thing, like there are people like me, that's, that have hammers, you know, and if you're a fractional CEO, like, look, for me it's pretty easy to resolve this pain. Point. Which for you would be like moving a mountain. For me, it's not that hard. That's, that's, that's the beauty. Yeah. The relationship.

[B]

Any other in terms of tech stack? What about marketing? We didn't talk about marketing. You got PR in your social media.

[C]

But yeah, I mean, no, I would say, I would say other email marketing. Yeah, yeah, we do all that loyalty. We have our own app. You can find it in the App Store.

[B]

And did you build that up or did you.

[C]

We work with a company called appfront and that's a third party that integrates with Toast.

[B]

Okay. And they built a custom app for you?

[C]

Yep.

[B]

Cool. And what about email marketing? What are you doing there?

[C]

Also through App front.

[B]

Cool.

[C]

Yeah. So when we, when we capture, you know, names and numbers, etcetera, through our system, it goes into our big customer, our CRM basically. And we can manage, you know, we can stratify. And this group's Paralyn. This group is Solana. This group, this is everyone. And we have newsletters that go out every month and we can SMS people, you know, and message them through the app. So it's really handy.

[B]

Any other services you've outsourced to? Things that you've done to get better that we haven't discussed.

[C]

The only thing I can think of that's, I don't know if this answers your question, but for the first time ever in the history of the brand, we got a billboard.

[B]

Oh, cool.

[C]

So it's not technically outsourcing a service, but like we've never done that before with marketing. Yeah, yeah, that's it. For this, for this, for this unit. We're like, look, the brand as a whole would benefit because there are people that still in Houston that don't know we exist. Yeah. And so, you know, we were like, let's, let's just, let's. It's very expensive, as you'd imagine. Yeah. You got hundreds of thousands of people doing it every day. But yeah, we can't, we just contact. I think years ago someone had reached out to us from. What's it called? It's out front media. I don't know. I think it's called the company that runs a specific one.

[B]

Is a digital billboard.

[C]

No.

[B]

Oh, yeah.

[C]

Traditional.

[B]

Yeah. And is there a measurable return on that? Is it too soon to tell?

[C]

It's too soon to tell. I, I, you know. Yeah.

[B]

You don't really have a baseline.

[C]

Probably it's brand new. Right. So we don't know, like what?

[B]

Well, you sold out.

[C]

Yeah, we did we did today.

[B]

Yeah, I did hear that you were up and I don't know if I'm allowed to say this, but I'm going to say you can tell me to edit it out if I'm not allowed to say it. You're up 15 points from, from. I don't know, I guess whatever you.

[C]

No, I think that's, that's about, that's, that's about an accurate statement. Yeah. The fact is. Yeah, I would, I would attribute at least 10 of those to the billboard. Yeah, it's, it's hard because you need to interview every person that walks in to say, are you here because of the board? It's anecdotal. Some will say it, some don't.

[B]

You can incentivize people for that data by saying, hey, freak, clacky on us if you fill out this form.

[C]

Yeah, that's true and good point.

[B]

How do you also capture their emails?

[C]

Yeah, that's a great point.

[B]

Anything that you were hoping would come out of today's conversation that did not come out.

[C]

No, I've liked how meandering it is. I love talking about all, I mean all of it. The, the tech and kind of the, the, the spirit and the whole nine yards. I love all of it.

[B]

Thank you, man. I really appreciate that. I do like to wrap up thinking about the future. As you look to the future future. Is there anything about the industry that, you know, you think we as an industry could be doing better? If the mission statement is to inspire, empower and transform the industry, what transformation do you want? Where are we and where could we be?

[C]

I have. Yeah, I have two. Two responses to that. So I'll name drop this. This business. We recently got to know the owner, Jonathan of Roadrunners. It's a drive through drinks. They've got energizer drinks, coffee, milkshakes and young guys, former chick fil A guys and just I went to their, their little, little hut, so to speak and the amount of technology and engineering and hacking was so impressive. Like I just, it was amazing. Their, their thing is they'll put a little a, an hourglass, a minute hourglass timer on your car and you pull up. If you don't get your drink in 60 seconds, it's free.

[B]

Oh, that's cool. Experiential too.

[C]

100 so you walk in, it's experiential. The gadgets, the. They got everything on tap. It just, I was, my mind was blown. So the first response I would say is I feel like the future, it really is, is Just super, super innovative, you know, like super innovative. And so whether it's experientially innovative or technology, they have these two gelato machines dispensing their. Their gelato to make the milkshakes. And to save up some seconds, they've got foot pedals that you can walk up, press it. You're not like having to, like, push or pull. Your feet are doing that's cool part of it. And so, Jonathan, hope that's okay that I said that. I'm sure. I'm sure it is, Jonathan.

[B]

Well, I already wrote the name down. Roadrunners. Jonathan, I gotta leave tomorrow, unfortunately, or else I'd be knocking on your door.

[C]

You should. Yeah, eventually. He's. He's well worth a conversation. But. So that's my first response I'd say is just super innovative. Right across the board. But the second thing I'd say is back, back to this tension. Is not innovative to the. To the expense of the human. I'd say this, this. This kind of the next. Next avant garde is not avant garde at all. It's just traditional. It's. It's super, super human and local and real.

[B]

Right.

[C]

So. So it's somehow marrying this ultra, ultra, like, tech forward. Not tech forward, innovative forward.

[B]

They say whatever the tweens are doing today is going to be what's popular tomorrow. Right. And right now they're unplugging.

[C]

Yeah, no, exactly. No, precisely. This is the thing. So, like, people want what's real, right? Real people doing real things, real stories. So I would say marrying those two things, right? Like, in other words, in other words, be innovative but not gimmicky.

[B]

Right?

[C]

Be like real, ultra human and innovative. That, to me, is the future. Yeah.

[B]

I think that as the world gets more.

[C]

It's.

[B]

It's getting to the point, like, where you go on social media, and I think that. I think AI is killing social media. I am so excited because it's. You get on there and you're like, I don't know what to trust anymore. I don't know what's real. And like, it just makes. It turns you off. And I think the only thing you can trust is the person sitting across the table.

[C]

Yeah.

[B]

You know, word of mouth. And so much of the world we live in today, I think marketing, while it's important and necessary, it is invasive and it just rots everything. It ruins everything.

[C]

I mean, I'll just. Just a quick little anecdote from today. So I'm here today, President's Day, so kids are off of school. That's actually why it was so busy today. So sorry we sold out and you didn't get.

[B]

Oh, no, that's okay. I'm gonna sleep in your park.

[C]

Yeah, there you go. But a person called me on the phone. This morning was the kind of place I know. I'm on the phone, I said, sure. It was kind of larger. And she's like, look, it's. You know, my dog just died and I'm taking these to the vet. That kind of handled that process. And I was like, I'm just so sorry. I'm a dog person myself and I'm sorry to hear that. I'm happy that you called us. So she comes in, it's all packed up. I mean, it was very real, very, very human. And I was thinking of either myself or Michael are in here most of the time. And it's just consistent and real and human. Like this phone call, a real person. It wasn't some automated system that said, you know, dictate your order here and then pay via the. No, it was just like a real. I answered, she conveyed the situation. I pack it up. She walks in, she goes, are you Randy? I said, yeah. You're Elise. Yep. You're Elise. Hi, Elise. Thanks again for talking to us. Hey, so sorry about the situation. I walk him out to her car. Like, I'm describing a situation that. That's all there was 30 years ago. Like, what else was there? 30 years, that was it.

[B]

Right.

[C]

Whereas now you're like, I'll pay a premium for that experience. So we're not.

[B]

Or you'll pay a very cheap amount to be able to not leave your house and have something drop in your steps. 100, you know.

[C]

Yeah, it's.

[B]

It's a weird time.

[C]

Weird time.

[B]

Yeah.

[C]

Yeah. So, hey, we're that space too, right? We're like all the to go stuff. Great. Get it.

[B]

I think that's the point is you got to really meet people wherever they're at.

[C]

You have to. Right. So for example, if we said we're going to be purists and only. No third party, no mobile, only here, we probably. We probably don't. We probably don't exist. Right? So we got to meet. Meet people where they're at.

[B]

I try really hard to stay open minded. Like, you know, like, I think that, like, I tend to lean in that direction of human side of things.

[C]

Yeah, yeah.

[B]

But I.

[C]

You have to know where you. Because here's the thing. How much positive impact are you making if you die? Right? None. So you got to stay Alive as a business. Right. So we're, we're nimble and open minded. But again, but, but it's not me saying no. It's. It's the, it's our values that say no.

[B]

Yeah. This has been so much fun. A couple questions that I last asked all my guests, some final questions. We're gonna wrap it up.

[C]

Yeah. Lightning round. Yes.

[B]

What is one thing about your business? A value process, a system that's uncommon and makes you truly, truly unstoppable?

[C]

Oh, man. I mean, I don't want to, I don't want to give a soft answer, but I'm going to. It really is our culture and our people. Like, it really is. If you said, what, what, what makes us that. That group of birch trees that doesn't get blown out off the face of the earth like you said earlier. It's. It's our culture and people just know who we are, what we're about.

[B]

I love it. The mission statement again, is to change the world through inspiring, empowering and transforming the industry. Every time I say that, I get at myself a little bit. So silly. But I. That is the mission and I think we're going to do it by changing one person at a time, by making an example of one person at a time. So how have you personally transformed. How are you a better man today than the man you were in 2014 when you became a restaurant owner?

[C]

Yeah, well, you know, when you're put through the ringer, you, you, you not only grain humility, so that's just humble and seasoned. The kids key is you become much more empathic because you're like, you start seeing the world much broader. And you know, when you go to a restaurant, for example, like, you know those people, if not literally, at least metaphorically, like, you know who's back there producing your food, you know, the vendors that bring your food, the drivers that come in, like, it's just very intimate and earthy. And so the phrase I use is it again, grounding ground? Yeah, that's it. That's what I would say. How, how am I better? I'm more grounded. Not that I was wildly ungrounded, but the fact is going through all the things I've gone through, just very earthy. And there's a phrase of you, you smell like the sheep, right? Like, like you're the shepherd, but you're not like aloof like, you smell like the sheep. That's kind of how I feel like I smell like the sheep, both in the industry and in my restaurant. And so I'D say just more grounded.

[B]

Wife says to you.

[C]

Yeah, yeah, exactly. Yeah. You smell like sausage and coffee. I'm like. I'm like, thank you. Is that a compliment? She's like, no, it's not.

[B]

So this is the last question before I have you call somebody out. If you got the news, you'd be leaving this world tomorrow. All the memories of you, your work, and your restaurants would be lost with your departure, with the exception of three pieces of wisdom that you can leave behind for the good of humanity and your legacy. What were those three pieces of wisdom? Be.

[C]

Oh, man. Like this. This could be a whole podcast on its own. But. But I. I mean, I'll just riff on some things we've already talked about. So I would say just like, you know, like. Like be humble and grounded. For sure. One like, one. Two is like, dude, have grit. Like, be perseverant.

[B]

Two.

[C]

Okay. Three would be be a foodie. Food is. Food is convivial. Right. Food. Food is life and culture. Like love food. Love cuisine, love cooking.

[B]

Food is literally life.

[C]

Literally.

[B]

I mean, what I mean by that is, like, what are the ingredients in your kolaches?

[C]

Yeah. Like flour and butter, sugar, yeast, eggs, milk.

[B]

How many of those things were, you know, alive?

[C]

Yeah.

[B]

Or from.

[C]

Yeah, most. Most of it.

[B]

Pretty much all of it. Except for the salt.

[C]

Yeah. Yeah.

[B]

And I think we forget that whatever we are eating was literally once life.

[C]

Yeah.

[B]

And we. We categorize that as a commodity, which to me, just blows my mind.

[C]

It's true.

[B]

You know, like, we. I think life is universally shared. Like whatever that life source is something that runs through all living things. And we categorize that as a commodity.

[C]

Yeah.

[B]

You know, it's crazy when you put it like that.

[C]

That's right. That's right. You want to honor the life that, you know, you're part of and to pass it along.

[B]

Yeah. This has been so much fun, man. Thank you so much, Eric.

[C]

Thank you.

[B]

So we wrap up every conversation by calling somebody out. I find 80% of my guests, through current guests, referring me to future guests.

[C]

Yeah.

[B]

I think the industry, you know, success recognizes success, good recognizes good. Birds of the same feather flock together. Who do you respect and admire in the restaurant industry and think I should get on the show?

[C]

Gosh. I mean, I could. I could. I could give you a whole list. Do I just pick one?

[B]

I mean, you can give me a list, man.

[C]

Well, the two. Well, I'm gonna give you the two names, unfortunately, in this podcast.

[B]

Are they all in Houston?

[C]

Yeah.

[B]

Oh, that's fine. I mean, I'll be back. I love it. Texas. It's a great place to come in the winter.

[C]

Well, actually, I'm gonna give you three.

[B]

Okay.

[C]

Okay. Good buddy of mine, Chris Svetlik, opened a restaurant, actually opened a kolache bakery in D.C. so you recall I was in D.C. yeah. After I left, he did the idea I had, which kind of likes doing them up there. It's called Republic Kolache. They have since morphed into Republic Cantina. Okay. So Chris Vetlik and he opened a burger joint called Hill East Burger. So if you're ever in the D.C. area, Chris Vetlik would be a phenomenal person to talk to.

[B]

Got it.

[C]

Good buddy of mine. Great, great restaura here in Houston. I mentioned Jonathan, the CEO of Roadrunners. Fantastic. Very innovative, exciting, fun story. And then Ronnie and Linda, owner operators of Roostar. Just. Just phenomenal. R O O S T A R. Yeah, A rustar. Exactly. Yeah. So, yeah, again, I've got more, so. But I'll leave it there. I'll leave it. I'll leave it at those.

[B]

You can let me know.

[C]

I will. Yeah.

[B]

I literally cannot do what I do, Randy, without people like you. Before we say goodbye, how do we connect if we're interested in learning more from you?

[C]

Yeah.

[B]

I'm gonna try to get you to join us live for coffee with Eric and the network, too.

[C]

That'd be fantastic.

[B]

Yeah, I'd love to have you join us.

[C]

Yeah. So kolachishop.com that's S-H-O-P-P-E again, K-O-L-A C-H E. S H-O-P-PPE.com all of our social media is on there. So you can really. You can order from online, you go to social from online, but get your website, you get to everything you need. Yeah.

[B]

And then check out the. The show notes. We'll have links, anything, any tool, services and links mentioned, including how to connect with Randy over there. And it sounds like Randy's down to join us for coffee with Eric. And if you listen to the closing thoughts, I'll also let you know what date that will be. Excellent. So, again, I cannot do what I do without people like you. Thank you so much for opening up, being generous and transparent. And I think if. If we're going to change the industry, it's going to come from the inside out and it's going to be because of people like you.

[C]

Yeah. And then, brother.

[B]

Yeah.

[C]

Yeah.

[B]

There is no questioning, Randy. You are unstoppable Cheers.

[A]

There's another episode wrapped up here at Restaurant Unstoppable. Randy Hines was a baller. What he did, how he started his restaurant, the way he's running his restaurant, doing one thing really well and using the franchise model to scale locally, I think, you know, I just think this is a case study of how to do it right. And if you want to connect with Randy and ask your questions about how he's doing it, he will be live for coffee with Eric on the 4th of May. 5, 4. If you want to join that conversation, be sure to head over to restaurant unstoppable.com CWE we'll get you the zoom link to join that conversation. And if you want to be a part of this and all future conversations in Restaurant Unstoppable Network, then I highly recommend you head over to Restaurant Unstoppable.com live and join our community. The vision is to lift each other up. This isn't a consultancy. It's a movement of me using word of mouth. Merit a meritocracy to go out and to find these specialists, to find the badass restaurant tours that are referring us, these specialists, to go to the technologies that these restaurateurs are using and to create a platform where we can learn together to lift each other up. Because if we don't lift each other up, no one else will. And if we're going to make a better future, it has to come from the inside out. And there is no better industry positioned than the restaurant industry to change the world. I believe that in my heart of hearts and I want you to be a part of it. Head over to Restaurant Stoppable. Com live to be a part of these live conversations and support this mission. We'll see you there.